[House Report 108-396]
[From the U.S. Government Publishing Office]
108th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 108-396
======================================================================
FAIR AND ACCURATE CREDIT TRANSACTIONS ACT, 2003
_______
November 21, 2003.--Ordered to be printed
_______
Mr. Oxley, from the committee of conference, submitted the following
CONFERENCE REPORT
[To accompany H.R. 2622]
The committee of conference on the disagreeing votes of
the two Houses on the amendment of the Senate to the bill (H.R.
2622), to amend the Fair Credit Reporting Act, to prevent
identity theft, improve resolution of consumer disputes,
improve the accuracy of consumer records, make improvements in
the use of, and consumer access to, credit information, and for
other purposes, having met, after full and free conference,
have agreed to recommend and do recommend to their respective
Houses as follows:
That the House recede from its disagreement to the
amendment of the Senate and agree to the same with an amendment
as follows:
In lieu of the matter proposed to be inserted by the
Senate amendment, insert the following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Fair and
Accurate Credit Transactions Act of 2003''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Effective dates.
TITLE I--IDENTITY THEFT PREVENTION AND CREDIT HISTORY RESTORATION
Subtitle A--Identity Theft Prevention
Sec. 111. Amendment to definitions.
Sec. 112. Fraud alerts and active duty alerts.
Sec. 113. Truncation of credit card and debit card account numbers.
Sec. 114. Establishment of procedures for the identification of possible
instances of identity theft.
Sec. 115. Authority to truncate social security numbers.
Subtitle B--Protection and Restoration of Identity Theft Victim Credit
History
Sec. 151. Summary of rights of identity theft victims.
Sec. 152. Blocking of information resulting from identity theft.
Sec. 153. Coordination of identity theft complaint investigations.
Sec. 154. Prevention of repollution of consumer reports.
Sec. 155. Notice by debt collectors with respect to fraudulent
information.
Sec. 156. Statute of limitations.
Sec. 157. Study on the use of technology to combat identity theft.
TITLE II--IMPROVEMENTS IN USE OF AND CONSUMER ACCESS TO CREDIT
INFORMATION
Sec. 211. Free consumer reports.
Sec. 212. Disclosure of credit scores.
Sec. 213. Enhanced disclosure of the means available to opt out of
prescreened lists.
Sec. 214. Affiliate sharing.
Sec. 215. Study of effects of credit scores and credit-based insurance
scores on availability and affordability of financial
products.
Sec. 216. Disposal of consumer report information and records.
Sec. 217. Requirement to disclose communications to a consumer reporting
agency.
TITLE III--ENHANCING THE ACCURACY OF CONSUMER REPORT INFORMATION
Sec. 311. Risk-based pricing notice.
Sec. 312. Procedures to enhance the accuracy and integrity of
information furnished to consumer reporting agencies.
Sec. 313. FTC and consumer reporting agency action concerning
complaints.
Sec. 314. Improved disclosure of the results of reinvestigation.
Sec. 315. Reconciling addresses.
Sec. 316. Notice of dispute through reseller.
Sec. 317. Reasonable reinvestigation required.
Sec. 318. FTC study of issues relating to the Fair Credit Reporting Act.
Sec. 319. FTC study of the accuracy of consumer reports.
TITLE IV--LIMITING THE USE AND SHARING OF MEDICAL INFORMATION IN THE
FINANCIAL SYSTEM
Sec. 411. Protection of medical information in the financial system.
Sec. 412. Confidentiality of medical contact information in consumer
reports.
TITLE V--FINANCIAL LITERACY AND EDUCATION IMPROVEMENT
Sec. 511. Short title.
Sec. 512. Definitions.
Sec. 513. Establishment of Financial Literacy and Education Commission.
Sec. 514. Duties of the Commission.
Sec. 515. Powers of the Commission.
Sec. 516. Commission personnel matters.
Sec. 517. Studies by the Comptroller General.
Sec. 518. The national public service multimedia campaign to enhance the
state of financial literacy.
Sec. 519. Authorization of appropriations.
TITLE VI--PROTECTING EMPLOYEE MISCONDUCT INVESTIGATIONS
Sec. 611. Certain employee investigation communications excluded from
definition of consumer report.
TITLE VII--RELATION TO STATE LAWS
Sec. 711. Relation to State laws.
TITLE VIII--MISCELLANEOUS
Sec. 811. Clerical amendments.
SEC. 2. DEFINITIONS.
As used in this Act--
(1) the term ``Board'' means the Board of Governors
of the Federal Reserve System;
(2) the term ``Commission'', other than as used in
title V, means the Federal Trade Commission;
(3) the terms ``consumer'', ``consumer report'',
``consumer reporting agency'', ``creditor'', ``Federal
banking agencies'', and ``financial institution'' have
the same meanings as in section 603 of the Fair Credit
Reporting Act, as amended by this Act; and
(4) the term ``affiliates'' means persons that are
related by common ownership or affiliated by corporate
control.
SEC. 3. EFFECTIVE DATES.
Except as otherwise specifically provided in this Act and
the amendments made by this Act--
(1) before the end of the 2-month period beginning
on the date of enactment of this Act, the Board and the
Commission shall jointly prescribe regulations in final
form establishing effective dates for each provision of
this Act; and
(2) the regulations prescribed under paragraph (1)
shall establish effective dates that are as early as
possible, while allowing a reasonable time for the
implementation of the provisions of this Act, but in no
case shall any such effective date be later than 10
months after the date of issuance of such regulations
in final form.
TITLE I--IDENTITY THEFT PREVENTION AND CREDIT HISTORY RESTORATION
Subtitle A--Identity Theft Prevention
SEC. 111. AMENDMENT TO DEFINITIONS.
Section 603 of the Fair Credit Reporting Act (15 U.S.C.
1681a) is amended by adding at the end the following:
``(q) Definitions Relating to Fraud Alerts.--
``(1) Active duty military consumer.--The term
`active duty military consumer' means a consumer in
military service who--
``(A) is on active duty (as defined in
section 101(d)(1) of title 10, United States
Code) or is a reservist performing duty under a
call or order to active duty under a provision
of law referred to in section 101(a)(13) of
title 10, United States Code; and
``(B) is assigned to service away from the
usual duty station of the consumer.
``(2) Fraud alert; active duty alert.--The terms
`fraud alert' and `active duty alert' mean a statement
in the file of a consumer that--
``(A) notifies all prospective users of a
consumer report relating to the consumer that
the consumer may be a victim of fraud,
including identity theft, or is an active duty
military consumer, as applicable; and
``(B) is presented in a manner that
facilitates a clear and conspicuous view of the
statement described in subparagraph (A) by any
person requesting such consumer report.
``(3) Identity theft.--The term `identity theft'
means a fraud committed using the identifying
information of another person, subject to such further
definition as the Commission may prescribe, by
regulation.
``(4) Identity theft report.--The term `identity
theft report' has the meaning given that term by rule
of the Commission, and means, at a minimum, a report--
``(A) that alleges an identity theft;
``(B) that is a copy of an official, valid
report filed by a consumer with an appropriate
Federal, State, or local law enforcement
agency, including the United States Postal
Inspection Service, or such other government
agency deemed appropriate by the Commission;
and
``(C) the filing of which subjects the
person filing the report to criminal penalties
relating to the filing of false information if,
in fact, the information in the report is
false.
``(5) New credit plan.--The term `new credit plan'
means a new account under an open end credit plan (as
defined in section 103(i) of the Truth in Lending Act)
or a new credit transaction not under an open end
credit plan.
``(r) Credit and Debit Related Terms--
``(1) Card issuer.--The term `card issuer' means--
``(A) a credit card issuer, in the case of
a credit card; and
``(B) a debit card issuer, in the case of a
debit card.
``(2) Credit card.--The term `credit card' has the
same meaning as in section 103 of the Truth in Lending
Act.
``(3) Debit card.--The term `debit card' means any
card issued by a financial institution to a consumer
for use in initiating an electronic fund transfer from
the account of the consumer at such financial
institution, for the purpose of transferring money
between accounts or obtaining money, property, labor,
or services.
``(4) Account and electronic fund transfer.--The
terms `account' and `electronic fund transfer' have the
same meanings as in section 903 of the Electronic Fund
Transfer Act.
``(5) Credit and creditor.--The terms `credit' and
`creditor' have the same meanings as in section 702 of
the Equal Credit Opportunity Act.
``(s) Federal Banking Agency.--The term `Federal banking
agency' has the same meaning as in section 3 of the Federal
Deposit Insurance Act.
``(t) Financial Institution.--The term `financial
institution' means a State or National bank, a State or Federal
savings and loan association, a mutual savings bank, a State or
Federal credit union, or any other person that, directly or
indirectly, holds a transaction account (as defined in section
19(b) of the Federal Reserve Act) belonging to a consumer.
``(u) Reseller.--The term `reseller' means a consumer
reporting agency that--
``(1) assembles and merges information contained in
the database of another consumer reporting agency or
multiple consumer reporting agencies concerning any
consumer for purposes of furnishingsuch information to
any third party, to the extent of such activities; and
``(2) does not maintain a database of the assembled
or merged information from which new consumer reports
are produced.
``(v) Commission.--The term `Commission' means the Federal
Trade Commission.
``(w) Nationwide Specialty Consumer Reporting Agency.--The
term `nationwide specialty consumer reporting agency' means a
consumer reporting agency that compiles and maintains files on
consumers on a nationwide basis relating to--
``(1) medical records or payments;
``(2) residential or tenant history;
``(3) check writing history;
``(4) employment history; or
``(5) insurance claims.''.
SEC. 112. FRAUD ALERTS AND ACTIVE DUTY ALERTS.
(a) Fraud Alerts.--The Fair Credit Reporting Act (15 U.S.C.
1681 et seq.) is amended by inserting after section 605 the
following:
``Sec. 605A. Identity theft prevention; fraud alerts and active duty
alerts
``(a) One-Call Fraud Alerts.--
``(1) Initial alerts.--Upon the direct request of a
consumer, or an individual acting on behalf of or as a
personal representative of a consumer, who asserts in
good faith a suspicion that the consumer has been or is
about to become a victim of fraud or related crime,
including identity theft, a consumer reporting agency
described in section 603(p) that maintains a file on
the consumer and has received appropriate proof of the
identity of the requester shall--
``(A) include a fraud alert in the file of
that consumer, and also provide that alert
along with any credit score generated in using
that file, for a period of not less than 90
days, beginning on the date of such request,
unless the consumer or such representative
requests that such fraud alert be removed
before the end of such period, and the agency
has received appropriate proof of the identity
of the requester for such purpose; and
``(B) refer the information regarding the
fraud alert under this paragraph to each of the
other consumer reporting agencies described in
section 603(p), in accordance with procedures
developed under section 621(f).
``(2) Access to free reports.--In any case in which
a consumer reporting agency includes a fraud alert in
the file of a consumer pursuant to this subsection, the
consumer reporting agency shall--
``(A) disclose to the consumer that the
consumer may request a free copy of the file of
the consumer pursuant to section 612(d); and
``(B) provide to the consumer all
disclosures required to be made under section
609, without charge to the consumer, not later
than 3 business days after any request
described in subparagraph (A).
``(b) Extended Alerts.--
``(1) In general.--Upon the direct request of a
consumer, or an individual acting on behalf of or as a
personal representative of a consumer, who submits an
identity theft report to a consumer reporting agency
described in section 603(p) that maintains a file on
the consumer, if the agency has received appropriate
proof of the identity of the requester, the agency
shall--
``(A) include a fraud alert in the file of
that consumer, and also provide that alert
along with any credit score generated in using
that file, during the 7-year period beginning
on thedate of such request, unless the consumer
or such representative requests that such fraud
alert be removed before the end of such period and
the agency has received appropriate proof of
the identity of the requester for such purpose;
``(B) during the 5-year period beginning on
the date of such request, exclude the consumer
from any list of consumers prepared by the
consumer reporting agency and provided to any
third party to offer credit or insurance to the
consumer as part of a transaction that was not
initiated by the consumer, unless the consumer
or such representative requests that such
exclusion be rescinded before the end of such
period; and
``(C) refer the information regarding the
extended fraud alert under this paragraph to
each of the other consumer reporting agencies
described in section 603(p), in accordance with
procedures developed under section 621(f).
``(2) Access to free reports.--In any case in which
a consumer reporting agency includes a fraud alert in
the file of a consumer pursuant to this subsection, the
consumer reporting agency shall--
``(A) disclose to the consumer that the
consumer may request 2 free copies of the file
of the consumer pursuant to section 612(d)
during the 12-month period beginning on the
date on which the fraud alert was included in
the file; and
``(B) provide to the consumer all
disclosures required to be made under section
609, without charge to the consumer, not later
than 3 business days after any request
described in subparagraph (A).
``(c) Active Duty Alerts.--Upon the direct request of an
active duty military consumer, or an individual acting on
behalf of or as a personal representative of an active duty
military consumer, a consumer reporting agency described in
section 603(p) that maintains a file on the active duty
military consumer and has received appropriate proof of the
identity of the requester shall--
``(1) include an active duty alert in the file of
that active duty military consumer, and also provide
that alert along with any credit score generated in
using that file, during a period of not less than 12
months, or such longer period as the Commission shall
determine, by regulation, beginning on the date of the
request, unless the active duty military consumer or
such representative requests that such fraud alert be
removed before the end of such period, and the agency
has received appropriate proof of the identity of the
requester for such purpose;
``(2) during the 2-year period beginning on the
date of such request, exclude the active duty military
consumer from any list of consumers prepared by the
consumer reporting agency and provided to any third
party to offer credit or insurance to the consumer as
part of a transaction that was not initiated by the
consumer, unless the consumer requests that such
exclusion be rescinded before the end of such period;
and
``(3) refer the information regarding the active
duty alert to each of the other consumer reporting
agencies described in section 603(p), in accordance
with procedures developed under section 621(f).
``(d) Procedures.--Each consumer reporting agency described
in section 603(p) shall establish policies and procedures to
comply with this section, including procedures that inform
consumers of the availability of initial, extended, and active
duty alerts and procedures that allow consumers and active duty
military consumers to request initial, extended, or active duty
alerts (as applicable) in a simple and easy manner, including
by telephone.
``(e) Referrals of Alerts.--Each consumer reporting agency
described in section 603(p) that receives a referral of a fraud
alert or active duty alert from another consumer reporting
agency pursuant to this section shall, as though the agency
received the request from the consumer directly, follow the
procedures required under--
``(1) paragraphs (1)(A) and (2) of subsection (a),
in the case of a referral under subsection (a)(1)(B);
``(2) paragraphs (1)(A), (1)(B), and (2) of
subsection (b), in the case of a referral under
subsection (b)(1)(C); and
``(3) paragraphs (1) and (2) of subsection (c), in
the case of a referral under subsection (c)(3).
``(f) Duty of Reseller To Reconvey Alert.--A reseller shall
include in its report any fraud alert or active duty alert
placed in the file of a consumer pursuant to this section by
another consumer reporting agency.
``(g) Duty of Other Consumer Reporting Agencies To Provide
Contact Information.--If a consumer contacts any consumer
reporting agency that is not described in section 603(p) to
communicate a suspicion that the consumer has been or is about
to become a victim of fraud or related crime, including
identity theft, the agency shall provide information to the
consumer on how to contact the Commission and the consumer
reporting agencies described in section 603(p) to obtain more
detailed information and request alerts under this section.
``(h) Limitations on Use of Information for Credit
Extensions..--
``(1) Requirements for initial and active duty
alerts.--
``(A) Notification.--Each initial fraud
alert and active duty alert under this section
shall include information that notifies all
prospective users of a consumer report on the
consumer to which the alert relates that the
consumer does not authorize the establishment
of any new credit plan or extension of credit,
other than under an open-end credit plan (as
defined in section 103(i)), in the name of the
consumer, or issuance of an additional card on
an existing credit account requested by a
consumer, or any increase in credit limit on an
existing credit account requested by a
consumer, except in accordance with
subparagraph (B).
``(B) Limitation on users.--
``(i) In general.--No prospective
user of a consumer report that includes
an initial fraud alert or an active
duty alert inaccordance with this
section may establish a new credit plan
or extension of credit, other than under
an open-end credit plan (as defined in
section 103(i)), in the name of the consumer,
or issue an additional card on an existing
credit account requested by a consumer, or
grant any increase in credit limit on an
existing credit account requested by a consumer,
unless the user utilizes reasonable policies and
procedures to form a reasonable belief that the
user knows the identity of the person making the
request.
``(ii) Verification.--If a consumer
requesting the alert has specified a
telephone number to be used for
identity verification purposes, before
authorizing any new credit plan or
extension described in clause (i) in
the name of such consumer, a user of
such consumer report shall contact the
consumer using that telephone number or
take reasonable steps to verify the
consumer's identity and confirm that
the application for a new credit plan
is not the result of identity theft.
``(2) Requirements for extended alerts.--
``(A) Notification.--Each extended alert
under this section shall include information
that provides all prospective users of a
consumer report relating to a consumer with--
``(i) notification that the
consumer does not authorize the
establishment of any new credit plan or
extension of credit described in clause
(i), other than under an open-end
credit plan (as defined in section
103(i)), in the name of the consumer,
or issuance of an additional card on an
existing credit account requested by a
consumer, or any increase in credit
limit on an existing credit account
requested by a consumer, except in
accordance with subparagraph (B); and
``(ii) a telephone number or other
reasonable contact method designated by
the consumer.
``(B) Limitation on users.--No prospective
user of a consumer report or of a credit score
generated using the information in the file of
a consumer that includes an extended fraud
alert in accordance with this section may
establish a new credit plan or extension of
credit, other than under an open-end credit
plan (as defined in section 103(i)), in the
name of the consumer, or issue an additional
card on an existing credit account requested by
a consumer, or any increase in credit limit on
an existing credit account requested by a
consumer, unless the user contacts the consumer
in person or using the contact method described
in subparagraph (A)(ii) to confirm that the
application for a new credit plan or increase
in credit limit, or request for an additional
card is not the result of identity theft.''.
(b) Rulemaking.--The Commission shall prescribe regulations
to define what constitutes appropriate proof of identity for
purposes of sections 605A, 605B, and 609(a)(1) of the Fair
Credit Reporting Act, as amended by this Act.
SEC. 113. TRUNCATION OF CREDIT CARD AND DEBIT CARD ACCOUNT NUMBERS.
Section 605 of the Fair Credit Reporting Act (15 U.S.C.
1681c) is amended by adding at the end the following:
``(g) Truncation of Credit Card and Debit Card Numbers.--
``(1) In general.--Except as otherwise provided in
this subsection, no person that accepts credit cards or
debit cards for the transaction of business shall print
more than the last 5 digits of the card number or the
expiration date upon any receipt provided to the
cardholder at the point of the sale or transaction.
``(2) Limitation.--This subsection shall apply only
to receipts that are electronically printed, and shall
not apply to transactions in which the sole means of
recording a credit card or debit card account number is
by handwriting or by an imprint or copy of the card.
``(3) Effective date.--This subsection shall become
effective--
``(A) 3 years after the date of enactment
of this subsection, with respect to any cash
register or other machine or device that
electronically prints receipts for credit card
or debit card transactions that is in use
before January 1, 2005; and
``(B) 1 year after the date of enactment of
this subsection, with respect to any cash
register or other machine or device that
electronically prints receipts for credit card
or debit card transactions that is first put
into use on or after January 1, 2005.''.
SEC. 114. ESTABLISHMENT OF PROCEDURES FOR THE IDENTIFICATION OF
POSSIBLE INSTANCES OF IDENTITY THEFT.
Section 615 of the Fair Credit Reporting Act (15 U.S.C.
1681m) is amended--
(1) by striking ``(e)'' at the end; and
(2) by adding at the end the following:
``(e) Red Flag Guidelines and Regulations Required.--
``(1) Guidelines.--The Federal banking agencies,
the National Credit Union Administration, and the
Commission shall jointly, with respect to the entities
that are subject to their respective enforcement
authority under section 621--
``(A) establish and maintain guidelines for
use by each financial institution and each
creditor regarding identity theft with respect
to account holders at, or customers of, such
entities, and update such guidelines as often
as necessary;
``(B) prescribe regulations requiring each
financial institution and each creditor to
establish reasonable policies and procedures
for implementing the guidelines established
pursuant to subparagraph (A), to identify
possible risks to account holders or customers
or to the safety and soundness of the
institution or customers; and
``(C) prescribe regulations applicable to
card issuers to ensure that, if a card issuer
receives notification of a change of address
for an existing account, and within a short
period of time (during at least the first 30
days after such notification is received)
receives a request for an additional or
replacement card for the same account, the card
issuer may not issue the additional or
replacement card, unless the card issuer, in
accordance with reasonable policies and
procedures--
``(i) notifies the cardholder of
the request at the former address of
the cardholder and provides to the
cardholder a means of promptly
reporting incorrect address changes;
``(ii) notifies the cardholder of
the request by such other means of
communication as the cardholder and the
card issuer previously agreed to; or
``(iii) uses other means of
assessing the validity of the change of
address, in accordance with reasonable
policies and procedures established by
the card issuer in accordance with the
regulations prescribed under
subparagraph (B).
``(2) Criteria.--
``(A) In general.--In developing the
guidelines required by paragraph (1)(A), the
agencies described in paragraph (1) shall
identify patterns, practices, and specific
forms of activity that indicate the possible
existence of identity theft.
``(B) Inactive accounts.--In developing the
guidelines required by paragraph (1)(A), the
agencies described in paragraph (1) shall
consider including reasonable guidelines
providing that when a transaction occurs with
respect to a credit or deposit account that has
been inactive for more than 2 years, the
creditor or financial institution shall follow
reasonable policies and procedures that provide
for notice to be given to a consumer in a
manner reasonably designed to reduce the
likelihood of identity theft with respect to
such account.
``(3) Consistency with verification requirements.--
Guidelines established pursuant to paragraph (1) shall
not be inconsistent with the policies and procedures
required under section 5318(l) of title 31, United
States Code.''.
SEC. 115. AUTHORITY TO TRUNCATE SOCIAL SECURITY NUMBERS.
Section 609(a)(1) of the Fair Credit Reporting Act (15
U.S.C. 1681g(a)(1)) is amended by striking ``except that
nothing'' and inserting the following: ``except that--
``(A) if the consumer to whom the file
relates requests that the first 5 digits of the
social security number (or similar
identification number) of the consumer not be
included in the disclosure and the consumer
reporting agency has received appropriate proof
of the identity of the requester, the consumer
reporting agency shall so truncate such number
in such disclosure; and
``(B) nothing''.
Subtitle B--Protection and Restoration of Identity Theft Victim Credit
History
SEC. 151. SUMMARY OF RIGHTS OF IDENTITY THEFT VICTIMS.
(a) In General.--
(1) Summary.--Section 609 of the Fair Credit
Reporting Act (15 U.S.C. 1681g) is amended by adding at
the end the following:
``(d) Summary of Rights of Identity Theft Victims.--
``(1) In general.--The Commission, in consultation
with the Federal banking agencies and the National
Credit Union Administration, shall prepare a model
summary of the rights of consumers under this title
with respect to the procedures for remedying the
effects of fraud or identity theft involving credit, an
electronic fund transfer, or an account or transaction
at or with a financial institution or other creditor.
``(2) Summary of rights and contact information.--
Beginning 60 days after the date on which the model
summary of rights is prescribed in final form by the
Commission pursuant to paragraph (1), if any consumer
contacts a consumer reporting agency and expresses a
belief that the consumer is a victim of fraud or
identity theft involving credit, an electronic fund
transfer, or an account or transaction at or with a
financial institution or other creditor, the consumer
reporting agency shall, in addition to any other action
that the agency may take, provide the consumer with a
summary of rights that contains all of the information
required by the Commission under paragraph (1), and
information on how to contact the Commission to obtain
more detailed information.
``(e) Information Available to Victims.--
``(1) In general.--For the purpose of documenting
fraudulent transactions resulting from identity theft,
not later than 30 days after the date of receipt of a
request from a victim in accordance with paragraph (3),
and subject to verification of the identity of the
victim and the claim of identity theft in accordance
with paragraph (2), a business entity that has provided
credit to, provided for consideration products, goods,
or services to, accepted payment from, or otherwise
entered into a commercial transaction for consideration
with, a person who has allegedly made unauthorized use
of the means of identification of the victim, shall
provide a copy of application and business transaction
records in the control of the business entity, whether
maintained by the business entity or by another person
on behalf of the business entity, evidencing any
transaction alleged to be a result of identity theft
to--
``(A) the victim;
``(B) any Federal, State, or local
government law enforcement agency or officer
specified by the victim in such a request; or
``(C) any law enforcement agency
investigating the identity theft and authorized
by the victim to take receipt of records
provided under this subsection.
``(2) Verification of identity and claim.--Before a
business entity provides any information under
paragraph (1), unless the business entity, at its
discretion, otherwise has a high degree of confidence
that it knows the identity of the victim making a
request under paragraph (1), the victim shall provide
to the business entity--
``(A) as proof of positive identification
of the victim, at the election of the business
entity--
``(i) the presentation of a
government-issued identification card;
``(ii) personally identifying
information of the same type as was
provided to the business entity by the
unauthorized person; or
``(iii) personally identifying
information that the business entity
typically requests from new applicants
or for new transactions, at the time of
the victim's request for information,
including any documentation described
in clauses (i) and (ii); and
``(B) as proof of a claim of identity
theft, at the election of the business entity--
``(i) a copy of a police report
evidencing the claim of the victim of
identity theft; and
``(ii) a properly completed--
``(I) copy of a
standardized affidavit of
identity theft developed and
made available by the
Commission; or
``(II) an affidavit of fact
that is acceptable to the
business entity for that
purpose.
``(3) Procedures.--The request of a victim under
paragraph (1) shall--
``(A) be in writing;
``(B) be mailed to an address specified by
the business entity, if any; and
``(C) if asked by the business entity,
include relevant information about any
transaction alleged to be a result of identity
theft to facilitate compliance with this
section including--
``(i) if known by the victim (or if
readily obtainable by the victim), the
date of the application or transaction;
and
``(ii) if known by the victim (or
if readily obtainable by the victim),
any other identifying information such
as an account or transaction number.
``(4) No charge to victim.--Information required to
be provided under paragraph (1) shall be so provided
without charge.
``(5) Authority to decline to provide
information.--A business entity may decline to provide
information under paragraph (1) if, in the exercise of
good faith, the business entity determines that--
``(A) this subsection does not require
disclosure of the information;
``(B) after reviewing the information
provided pursuant to paragraph (2), the
business entity does not have a high degree of
confidence in knowing the true identity of the
individual requesting the information;
``(C) the request for the information is
based on a misrepresentation of fact by the
individual requesting the information relevant
to the request for information; or
``(D) the information requested is Internet
navigational data or similar information about
a person's visit to a website or online
service.
``(6) Limitation on liability.--Except as provided
in section 621, sections 616 and 617 do not apply to
any violation of this subsection.
``(7) Limitation on civil liability.--No business
entity may be held civilly liable under any provision
of Federal, State, or other law for disclosure, made in
good faith pursuant to this subsection.
``(8) No new recordkeeping obligation.--Nothing in
this subsection creates an obligation on the part of a
business entity to obtain, retain, or maintain
information or records that are not otherwise required
to be obtained, retained, or maintained in the ordinary
course of its business or under other applicable law.
``(9) Rule of construction.--
``(A) In general.--No provision of subtitle
A of title V of Public Law 106-102, prohibiting
the disclosure of financial information by a
business entity to third parties shall be used
to deny disclosure of information to the victim
under this subsection.
``(B) Limitation.--Except as provided in
subparagraph (A), nothing in this subsection
permits a business entity to disclose
information, including information to law
enforcement under subparagraphs (B) and (C) of
paragraph (1), that the business entity is
otherwise prohibited from disclosing under any
other applicable provision of Federal or State
law.
``(10) Affirmative defense.--In any civil action
brought to enforce this subsection, it is an
affirmative defense (which the defendant must establish
by a preponderance of the evidence) for a business
entity to file an affidavit or answer stating that--
``(A) the business entity has made a
reasonably diligent search of its available
business records; and
``(B) the records requested under this
subsection do not exist or are not reasonably
available.
``(11) Definition of victim.--For purposes of this
subsection, the term `victim' means a consumer whose
means of identification or financial information has
been used or transferred (or has been alleged to have
been used or transferred) without the authority of that
consumer, with the intent to commit, or to aid or abet,
an identity theft or a similar crime.
``(12) Effective date.--This subsection shall
become effective 180 days after the date of enactment
of this subsection.
``(13) Effectiveness study.--Not later than 18
months after the date of enactment of this subsection,
the Comptroller General of the United States shall
submit a report to Congress assessing the effectiveness
of this provision.''.
(2) Relation to state laws.--Section 625(b)(1) of
the Fair Credit Reporting Act (15 U.S.C. 1681t(b)(1),
as so redesignated) is amended by adding at the end the
following new subparagraph:
``(G) section 609(e), relating to
information available to victims under section
609(e);''.
(b) Public Campaign To Prevent Identity Theft.--Not later
than 2 years after the date of enactment of this Act, the
Commission shall establish and implement a media and
distribution campaign to teach the public how to prevent
identity theft. Such campaign shall include existing Commission
education materials, as well as radio, television, and print
public service announcements, video cassettes, interactive
digital video discs (DVD's) or compact audio discs (CD's), and
Internet resources.
SEC. 152. BLOCKING OF INFORMATION RESULTING FROM IDENTITY THEFT.
(a) In General.--The Fair Credit Reporting Act (15 U.S.C.
1681 et seq.) is amended by inserting after section 605A, as
added by this Act, the following:
``Sec. 605B. Block of information resulting from identity theft
``(a) Block.--Except as otherwise provided in this section,
a consumer reporting agency shall block the reporting of any
information in the file of a consumer that the consumer
identifies as information that resulted from an alleged
identity theft, not later than 4 business days after the date
of receipt by such agency of--
``(1) appropriate proof of the identity of the
consumer;
``(2) a copy of an identity theft report;
``(3) the identification of such information by the
consumer; and
``(4) a statement by the consumer that the
information is not information relating to any
transaction by the consumer.
``(b) Notification.--A consumer reporting agency shall
promptly notify the furnisher of information identified by the
consumer under subsection (a)--
``(1) that the information may be a result of
identity theft;
``(2) that an identity theft report has been filed;
``(3) that a block has been requested under this
section; and
``(4) of the effective dates of the block.
``(c) Authority To Decline or Rescind.--
``(1) In general.--A consumer reporting agency may
decline to block, or may rescind any block, of
information relating to a consumer under this section,
if the consumer reporting agency reasonably determines
that--
``(A) the information was blocked in error
or a block was requested by the consumer in
error;
``(B) the information was blocked, or a
block was requested by the consumer, on the
basis of a material misrepresentation of fact
by the consumer relevant to the request to
block; or
``(C) the consumer obtained possession of
goods, services, or money as a result of the
blocked transaction or transactions.
``(2) Notification to consumer.--If a block of
information is declined or rescinded under this
subsection, the affected consumer shall be notified
promptly, in the same manner as consumers are notified
of the reinsertion of information under section
611(a)(5)(B).
``(3) Significance of block.--For purposes of this
subsection, if a consumer reporting agency rescinds a
block, the presence of information in the file of a
consumer prior to the blocking of such information is
not evidence of whether the consumer knew or should
have known that the consumer obtained possession of any
goods, services, or money as a result of the block.
``(d) Exception for Resellers.--
``(1) No reseller file.--This section shall not
apply to a consumer reporting agency, if the consumer
reporting agency--
``(A) is a reseller;
``(B) is not, at the time of the request of
the consumer under subsection (a), otherwise
furnishing or reselling a consumer report
concerning the information identified by the
consumer; and
``(C) informs the consumer, by any means,
that the consumer may report the identity theft
to the Commission to obtain consumer
information regarding identity theft.
``(2) Reseller with file.--The sole obligation of
the consumer reporting agency under this section, with
regard to any request of a consumer under this section,
shall be to block the consumer report maintained by the
consumer reporting agency from any subsequent use, if--
``(A) the consumer, in accordance with the
provisions of subsection (a), identifies, to a
consumer reporting agency, information in the
file of the consumer that resulted from
identity theft; and
``(B) the consumer reporting agency is a
reseller of the identified information.
``(3) Notice.--In carrying out its obligation under
paragraph (2), the reseller shall promptly provide a
notice to the consumer of the decision to block the
file. Such notice shall contain the name, address, and
telephone number of each consumer reporting agency from
which the consumer information was obtained for resale.
``(e) Exception for Verification Companies.--The provisions
of this section do not apply to a check services company,
acting as such, which issues authorizations for the purpose of
approving or processing negotiable instruments, electronic fund
transfers, or similar methods of payments, except that,
beginning 4 business days after receipt of information
described in paragraphs (1) through (3) of subsection (a), a
check services company shall not report to a national consumer
reporting agency described in section 603(p), any information
identified in the subject identity theft report as resulting
from identity theft.
``(f) Access to Blocked Information by Law Enforcement
Agencies.--No provision of this section shall be construed as
requiring a consumer reporting agency to prevent a Federal,
State, or local law enforcement agency from accessing blocked
information in a consumer file to which the agency could
otherwise obtain access under this title.''.
(b) Clerical Amendment.--The table of sections for the Fair
Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended by
inserting after the item relating to section 605 the following
new items:
``605A. Identity theft prevention; fraud alerts and active duty alerts.
``605B. Block of information resulting from identity theft.''.
SEC. 153. COORDINATION OF IDENTITY THEFT COMPLAINT INVESTIGATIONS.
Section 621 of the Fair Credit Reporting Act (15 U.S.C.
1681s) is amended by adding at the end the following:
``(f) Coordination of Consumer Complaint Investigations.--
``(1) In general.--Each consumer reporting agency
described in section 603(p) shall develop and maintain
procedures for the referral to each other such agency
of any consumer complaint received by the agency
alleging identity theft, or requesting a fraud alert
under section 605A or a block under section 605B.
``(2) Model form and procedure for reporting
identity theft.--The Commission, in consultation with
the Federal banking agencies and the National Credit
Union Administration, shall develop a model form and
model procedures to be used by consumers who are
victims of identity theft for contacting and informing
creditors and consumer reporting agencies of the fraud.
``(3) Annual summary reports.--Each consumer
reporting agency described in section 603(p) shall
submit an annual summary report to the Commission on
consumer complaints received by the agency on identity
theft or fraud alerts.''.
SEC. 154. PREVENTION OF REPOLLUTION OF CONSUMER REPORTS.
(a) Prevention of Reinsertion of Erroneous Information.--
Section 623(a) of the Fair Credit Reporting Act (15 U.S.C.
1681s-2(a)) is amended by adding at the end the following:
``(6) Duties of furnishers upon notice of identity
theft-related information.--
``(A) Reasonable procedures.--A person that
furnishes information to any consumer reporting
agency shall have in place reasonable
procedures to respond to any notification that
it receives from a consumer reporting agency
under section 605B relating to information
resulting from identity theft, to prevent that
person from refurnishing such blocked
information.
``(B) Information alleged to result from
identity theft.--If a consumer submits an
identity theft report to a person who furnishes
information to a consumer reporting agency at
the address specified by that person for
receiving such reports stating that information
maintained by such person that purports to
relate to the consumer resulted from identity
theft, the person may not furnish such
information that purports to relate to the
consumer to any consumer reporting agency,
unless the person subsequently knows or is
informed by the consumer that the information
is correct.''.
(b) Prohibition on Sale or Transfer of Debt Caused by
Identity Theft.--Section 615 of the Fair Credit Reporting Act
(15 U.S.C. 1681m), as amended by this Act, is amended by adding
at the end the following:
``(f) Prohibition on Sale or Transfer of Debt Caused by
Identity Theft.--
``(1) In general.--No person shall sell, transfer
for consideration, or place for collection a debt that
such person has been notified under section 605B has
resulted from identity theft.
``(2) Applicability.--The prohibitions of this
subsection shall apply to all persons collecting a debt
described in paragraph (1) after the date of a
notification under paragraph (1).
``(3) Rule of construction.--Nothing in this
subsection shall be construed to prohibit--
``(A) the repurchase of a debt in any case
in which the assignee of the debt requires such
repurchase because the debt has resulted from
identity theft;
``(B) the securitization of a debt or the
pledging of a portfolio of debt as collateral
in connection with a borrowing; or
``(C) the transfer of debt as a result of a
merger, acquisition, purchase and assumption
transaction, or transfer of substantially all
of the assets of an entity.''.
SEC. 155. NOTICE BY DEBT COLLECTORS WITH RESPECT TO FRAUDULENT
INFORMATION.
Section 615 of the Fair Credit Reporting Act (15 U.S.C.
1681m), as amended by this Act, is amended by adding at the end
the following:
``(g) Debt Collector Communications Concerning Identity
Theft.--If a person acting as a debt collector (as that term is
defined in title VIII) on behalf of a third party that is a
creditor or other user of a consumer report is notified that
any information relating to a debt that the person is
attempting to collect may be fraudulent or may be the result of
identity theft, that person shall--
``(1) notify the third party that the information
may be fraudulent or may be the result of identity
theft; and
``(2) upon request of the consumer to whom the debt
purportedly relates, provide to the consumer all
information to which the consumer would otherwise be
entitled if the consumer were not a victim of identity
theft, but wished to dispute the debt under provisions
of law applicable to that person.''.
SEC. 156. STATUTE OF LIMITATIONS.
Section 618 of the Fair Credit Reporting Act (15 U.S.C.
1681p) is amended to read as follows:
``Sec. 618. Jurisdiction of courts; limitation of actions
``An action to enforce any liability created under this
title may be brought in any appropriate United States district
court, without regard to the amount in controversy, or in any
other court of competent jurisdiction, not later than the
earlier of--
``(1) 2 years after the date of discovery by the
plaintiff of the violation that is the basis for such
liability; or
``(2) 5 years after the date on which the violation
that is the basis for such liability occurs.''.
SEC. 157. STUDY ON THE USE OF TECHNOLOGY TO COMBAT IDENTITY THEFT.
(a) Study Required.--The Secretary of the Treasury shall
conduct a study of the use of biometrics and other similar
technologies to reduce the incidence and costs to society of
identity theft by providing convincing evidence of who actually
performed a given financial transaction.
(b) Consultation.--The Secretary of the Treasury shall
consult with Federal banking agencies, the Commission, and
representatives of financial institutions, consumer reporting
agencies, Federal, State, and local government agencies that
issue official forms or means of identification, State
prosecutors, law enforcement agencies, the biometric industry,
and the general public in formulating and conducting the study
required by subsection (a).
(c) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of the Treasury for fiscal
year 2004, such sums as may be necessary to carry out the
provisions of this section.
(d) Report Required.--Before the end of the 180-day period
beginning on the date of enactment of this Act,the Secretary
shall submit a report to Congress containing the findings and
conclusions of the study required under subsection (a), together with
such recommendations for legislative or administrative actions as may
be appropriate.
TITLE II--IMPROVEMENTS IN USE OF AND CONSUMER ACCESS TO CREDIT
INFORMATION
SEC. 211. FREE CONSUMER REPORTS.
(a) In General.--Section 612 of the Fair Credit Reporting
Act (15 U.S.C. 1681j) is amended--
(1) by redesignating subsection (a) as subsection
(f), and transferring it to the end of the section;
(2) by inserting before subsection (b) the
following:
``(a) Free Annual Disclosure.--
``(1) Nationwide consumer reporting agencies.--
``(A) In general.--All consumer reporting
agencies described in subsections (p) and (w)
of section 603 shall make all disclosures
pursuant to section 609 once during any 12-
month period upon request of the consumer and
without charge to the consumer.
``(B) Centralized source.--Subparagraph (A)
shall apply with respect to a consumer
reporting agency described in section 603(p)
only if the request from the consumer is made
using the centralized source established for
such purpose in accordance with section 211(c)
of the Fair and Accurate Credit Transactions
Act of 2003.
``(C) Nationwide specialty consumer
reporting agency.--
``(i) In general.--The Commission
shall prescribe regulations applicable
to each consumer reporting agency
described in section 603(w) to require
the establishment of a streamlined
process for consumers to request
consumer reports under subparagraph
(A), which shall include, at a minimum,
the establishment by each such agency
of a toll-free telephone number for
such requests.
``(ii) Considerations.--In
prescribing regulations under clause
(i), the Commission shall consider--
``(I) the significant
demands that may be placed on
consumer reporting agencies in
providing such consumer
reports;
``(II) appropriate means to
ensure that consumer reporting
agencies can satisfactorily
meet those demands, including
the efficacy of a system of
staggering the availability to
consumers of such consumer
reports; and
``(III) the ease by which
consumers should be able to
contact consumer reporting
agencies with respect to access
to such consumer reports.
``(iii) Date of issuance.--The
Commission shall issue the regulations
required by this subparagraph in final
form not later than 6 months after the
date of enactment of the Fair and
Accurate Credit Transactions Act of
2003.
``(iv) Consideration of ability to
comply.--The regulations of the
Commission under this subparagraph
shall establish an effective date by
which each nationwide specialty
consumer reporting agency (as defined
in section 603(w)) shall be required to
comply with subsection (a), which
effective date--
``(I) shall be established
after consideration of the
ability of each nationwide
specialty consumer reporting
agency to comply with
subsection (a); and
``(II) shall be not later
than 6 months after the date on
which such regulations are
issued in final form (or such
additional period not to exceed
3 months, as the Commission
determines appropriate).
``(2) Timing.--A consumer reporting agency shall
provide a consumer report under paragraph (1) not later
than 15 days after the date on which the request is
received under paragraph (1).
``(3) Reinvestigations.--Notwithstanding the time
periods specified in section 611(a)(1), a
reinvestigation under that section by a consumer
reporting agency upon a request of a consumer that is
made after receiving a consumer report under this
subsection shall be completed not later than 45 days
after the date on which the request is received.
``(4) Exception for first 12 months of operation.--
This subsection shall not apply to a consumer reporting
agency that has not been furnishing consumer reports to
third parties on a continuing basis during the 12-month
period preceding a request under paragraph (1), with
respect to consumers residing nationwide.'';
(3) by redesignating subsection (d) as subsection
(e);
(4) by inserting before subsection (e), as
redesignated, the following:
``(d) Free Disclosures in Connection With Fraud Alerts.--
Upon the request of a consumer, a consumer reporting agency
described in section 603(p) shall make all disclosures pursuant
to section 609 without charge to the consumer, as provided in
subsections (a)(2) and (b)(2) of section 605A, as
applicable.'';
(5) in subsection (e), as redesignated, by striking
``subsection (a)'' and inserting ``subsection (f)'';
and
(6) in subsection (f), as redesignated, by striking
``Except as provided in subsections (b), (c), and (d),
a'' and inserting ``In the case of a request from a
consumer other than a request that is covered by any of
subsections (a) through (d), a''.
(b) Circumvention Prohibited.--The Fair Credit Reporting
Act (15 U.S.C. 1681 et seq.) is amended by adding after section
628, as added by section 216 of this Act, the following new
section:
``Sec. 629. Corporate and technological circumvention prohibited
``The Commission shall prescribe regulations, to become
effective not later than 90 days after the date of enactment of
this section, to prevent a consumer reporting agency from
circumventing or evading treatment as a consumer reporting
agency described in section 603(p) for purposes of this title,
including--
``(1) by means of a corporate reorganization or
restructuring, including a merger, acquisition,
dissolution, divestiture, or asset sale of a consumer
reporting agency; or
``(2) by maintaining or merging public record and
credit account information in a manner that is
substantially equivalent to that described in
paragraphs (1) and (2) of section 603(p), in the manner
described in section 603(p).''.
(c) Summary of Rights To Obtain and Dispute Information in
Consumer Reports and To Obtain Credit Scores.--Section 609(c)
of the Fair Credit Reporting Act (15 U.S.C. 1681g) is amended
to read as follows:
``(c) Summary of Rights To Obtain and Dispute Information
in Consumer Reports and To Obtain Credit Scores.--
``(1) Commission summary of rights required.--
``(A) In general.--The Commission shall
prepare a model summary of the rights of
consumers under this title.
``(B) Content of summary.--The summary of
rights prepared under subparagraph (A) shall
include a description of--
``(i) the right of a consumer to
obtain a copy of a consumer report
under subsection (a) from each consumer
reporting agency;
``(ii) the frequency and
circumstances under which a consumer is
entitled to receive a consumer report
without charge under section 612;
``(iii) the right of a consumer to
dispute information in the file of the
consumer under section 611;
``(iv) the right of a consumer to
obtain a credit score from a consumer
reporting agency, and a description of
how to obtain a credit score;
``(v) the method by which a
consumer can contact, and obtain a
consumer report from, a consumer
reporting agency without charge, as
provided in the regulations of the
Commission prescribed under section
211(c) of the Fair and Accurate Credit
Transactions Act of 2003; and
``(vi) the method by which a
consumer can contact, and obtain a
consumer report from, a consumer
reporting agency described in section
603(w), as provided in the regulations
of the Commission prescribed under
section 612(a)(1)(C).
``(C) Availability of summary of rights.--
The Commission shall--
``(i) actively publicize the
availability of the summary of rights
prepared under this paragraph;
``(ii) conspicuously post on its
Internet website the availability of
such summary of rights; and
``(iii) promptly make such summary
of rights available to consumers, on
request.
``(2) Summary of rights required to be included
with agency disclosures.--A consumer reporting agency
shall provide to a consumer, with each written
disclosure by the agency to the consumer under this
section--
``(A) the summary of rights prepared by the
Commission under paragraph (1);
``(B) in the case of a consumer reporting
agency described in section 603(p), a toll-free
telephone number established by the agency, at
which personnel are accessible to consumers
during normal business hours;
``(C) a list of all Federal agencies
responsible for enforcing any provision of this
title, and the address and any appropriate
phone number of each such agency, in a form
that will assist the consumer in selecting the
appropriate agency;
``(D) a statement that the consumer may
have additional rights under State law, and
that the consumer may wish to contact a State
or local consumer protection agency or a State
attorney general (or the equivalent thereof) to
learn of those rights; and
``(E) a statement that a consumer reporting
agency is not required to remove accurate
derogatory information from the file of a
consumer, unless the information is outdated
under section 605 or cannot be verified.''.
(d) Rulemaking Required.--
(1) In general.--The Commission shall prescribe
regulations applicable to consumer reporting agencies
described in section 603(p) of the Fair Credit
Reporting Act, to require the establishment of--
(A) a centralized source through which
consumers may obtain a consumer report from
each such consumer reporting agency, using a
single request, and without charge to the
consumer, as provided in section 612(a) of the
Fair Credit Reporting Act (as amended by this
section); and
(B) a standardized form for a consumer to
make such a request for a consumer report by
mail or through an Internet website.
(2) Considerations.--In prescribing regulations
under paragraph (1), the Commission shall consider--
(A) the significant demands that may be
placed on consumer reporting agencies in
providing such consumer reports;
(B) appropriate means to ensure that
consumer reporting agencies can satisfactorily
meet those demands, including the efficacy of a
system of staggering the availability to
consumers of such consumer reports; and
(C) the ease by which consumers should be
able to contact consumer reporting agencies
with respect to access to such consumer
reports.
(3) Centralized source.--The centralized source for
a request for a consumer report from a consumer
required by this subsection shall provide for--
(A) a toll-free telephone number for such
purpose;
(B) use of an Internet website for such
purpose; and
(C) a process for requests by mail for such
purpose.
(4) Transition.--The regulations of the Commission
under paragraph (1) shall provide for an orderly
transition by consumer reporting agencies described in
section 603(p) of the Fair Credit Reporting Act to the
centralized source for consumer report distribution
required by section 612(a)(1)(B), as amended by this
section, in a manner that--
(A) does not temporarily overwhelm such
consumer reporting agencies with requests for
disclosures of consumer reports beyond their
capacity to deliver; and
(B) does not deny creditors, other users,
and consumers access to consumer reports on a
time-sensitive basis for specific purposes,
such as home purchases or suspicions of
identity theft, during the transition period.
(5) Timing.--Regulations required by this
subsection shall--
(A) be issued in final form not later than
6 months after the date of enactment of this
Act; and
(B) become effective not later than 6
months after the date on which they are issued
in final form.
(6) Scope of regulations.--
(A) In general.--The Commission shall, by
rule, determine whether to require a consumer
reporting agency that compiles and maintains
files on consumers on substantially a
nationwide basis, other than one described in
section 603(p) of the Fair Credit Reporting
Act, to make free consumer reports available
upon consumer request, and if so, whether such
consumer reporting agencies should make such
free reports available through the centralized
source described in paragraph (1)(A).
(B) Considerations.--Before making any
determination under subparagraph (A), the
Commission shall consider--
(i) the number of requests for
consumer reports to, and the number of
consumer reports generated by, the
consumer reporting agency, in
comparison with consumer reporting
agencies described in subsections (p)
and (w) of section 603 of the Fair
Credit Reporting Act;
(ii) the overall scope of the
operations of the consumer reporting
agency;
(iii) the needs of consumers for
access to consumer reports provided by
consumer reporting agencies free of
charge;
(iv) the costs of providing access
to consumer reports by consumer
reporting agencies free of charge; and
(v) the effects on the ongoing
competitive viability of such consumer
reporting agencies if such free access
is required.
SEC. 212. DISCLOSURE OF CREDIT SCORES.
(a) Statement on Availability of Credit Scores.--Section
609(a) of the Fair Credit Reporting Act (15 U.S.C. 1681g(a)) is
amended by adding at the end the following new paragraph:
``(6) If the consumer requests the credit file and
not the credit score, a statement that the consumer may
request and obtain a credit score.''.
(b) Disclosure of Credit Scores.--Section 609 of the Fair
Credit Reporting Act (15 U.S.C. 1681g), as amended by this Act,
is amended by adding at the end the following:
``(f) Disclosure of Credit Scores.--
``(1) In general.--Upon the request of a consumer
for a credit score, a consumer reporting agency shall
supply to the consumer a statement indicating that the
information and credit scoring model may be different
than the credit score that may be used by the lender,
and a notice which shall include--
``(A) the current credit score of the
consumer or the most recent credit score of the
consumer that was previously calculated by the
credit reporting agency for a purpose related
to the extension of credit;
``(B) the range of possible credit scores
under the model used;
``(C) all of the key factors that adversely
affected the credit score of the consumer in
the model used, the total number of which shall
not exceed 4, subject to paragraph (9);
``(D) the date on which the credit score
was created; and
``(E) the name of the person or entity that
provided the credit score or credit file upon
which the credit score was created.
``(2) Definitions.--For purposes of this
subsection, the following definitions shall apply:
``(A) Credit score.--The term `credit
score'--
``(i) means a numerical value or a
categorization derived from a
statistical tool or modeling system
used by a person who makes or arranges
a loan to predict the likelihood of
certain credit behaviors, including
default (and the numerical value or the
categorization derived from such
analysis may also be referred to as a
`risk predictor' or `risk score'); and
``(ii) does not include--
``(I) any mortgage score or
rating of an automated
underwriting system that
considers one or more factors
in addition to credit
information, including the loan
to value ratio, the amount of
down payment, or the financial
assets of a consumer; or
``(II) any other elements
of the underwriting process or
underwriting decision.
``(B) Key factors.--The term `key factors'
means all relevant elements or reasons
adversely affecting the credit score for the
particular individual, listed in the order of
theirimportance based on their effect on the
credit score.
``(3) Timeframe and manner of disclosure.--The
information required by this subsection shall be
provided in the same timeframe and manner as the
information described in subsection (a).
``(4) Applicability to certain uses.--This
subsection shall not be construed so as to compel a
consumer reporting agency to develop or disclose a
score if the agency does not--
``(A) distribute scores that are used in
connection with residential real property
loans; or
``(B) develop scores that assist credit
providers in understanding the general credit
behavior of a consumer and predicting the
future credit behavior of the consumer.
``(5) Applicability to credit scores developed by
another person.--
``(A) In general.--This subsection shall
not be construed to require a consumer
reporting agency that distributes credit scores
developed by another person or entity to
provide a further explanation of them, or to
process a dispute arising pursuant to section
611, except that the consumer reporting agency
shall provide the consumer with the name and
address and website for contacting the person
or entity who developed the score or developed
the methodology of the score.
``(B) Exception.--This paragraph shall not
apply to a consumer reporting agency that
develops or modifies scores that are developed
by another person or entity.
``(6) Maintenance of credit scores not required.--
This subsection shall not be construed to require a
consumer reporting agency to maintain credit scores in
its files.
``(7) Compliance in certain cases.--In complying
with this subsection, a consumer reporting agency
shall--
``(A) supply the consumer with a credit
score that is derived from a credit scoring
model that is widely distributed to users by
that consumer reporting agency in connection
with residential real property loans or with a
credit score that assists the consumer in
understanding the credit scoring assessment of
the credit behavior of the consumer and
predictions about the future credit behavior of
the consumer; and
``(B) a statement indicating that the
information and credit scoring model may be
different than that used by the lender.
``(8) Fair and reasonable fee.--A consumer
reporting agency may charge a fair and reasonable fee,
as determined by the Commission, for providing the
information required under this subsection.
``(9) Use of enquiries as a key factor.--If a key
factor that adversely affects the credit score of a
consumer consists of the number of enquiries made with
respect to a consumer report, that factor shall be
included in the disclosure pursuant to paragraph (1)(C)
without regard to the numerical limitation in such
paragraph.''.
(c) Disclosure of Credit Scores by Certain Mortgage
Lenders.--Section 609 of the Fair Credit Reporting Act (15
U.S.C. 1681g), as amended by this Act, is amended by adding at
the end the following:
``(g) Disclosure of Credit Scores by Certain Mortgage
Lenders.--
``(1) In general.--Any person who makes or arranges
loans and who uses a consumer credit score, as defined
in subsection (f), in connection with an application
initiated or sought by a consumer for a closed end loan
or the establishment of an open end loan for a consumer
purpose that is secured by 1 to 4 units of residential
real property (hereafter in this subsection referred to
as the `lender') shall provide the following to the
consumer as soon as reasonably practicable:
``(A) Information required under subsection
(f).--
``(i) In general.--A copy of the
information identified in subsection
(f) that was obtained from a consumer
reporting agency or was developed and
used by the user of the information.
``(ii) Notice under subparagraph
(D).--In addition to the information
provided to it by a third party that
provided the credit score or scores, a
lender is only required to provide the
notice contained in subparagraph (D).
``(B) Disclosures in case of automated
underwriting system.--
``(i) In general.--If a person that
is subject to this subsection uses an
automated underwriting system to
underwrite a loan, that person may
satisfy the obligationto provide a
credit score by disclosing a credit score and associated key factors
supplied by a consumer reporting agency.
``(ii) Numerical credit score.--
However, if a numerical credit score is
generated by an automated underwriting
system used by an enterprise, and that
score is disclosed to the person, the
score shall be disclosed to the
consumer consistent with subparagraph
(C).
``(iii) Enterprise defined.--For
purposes of this subparagraph, the term
`enterprise' has the same meaning as in
paragraph (6) of section 1303 of the
Federal Housing Enterprises Financial
Safety and Soundness Act of 1992.
``(C) Disclosures of credit scores not
obtained from a consumer reporting agency.--A
person that is subject to the provisions of
this subsection and that uses a credit score,
other than a credit score provided by a
consumer reporting agency, may satisfy the
obligation to provide a credit score by
disclosing a credit score and associated key
factors supplied by a consumer reporting
agency.
``(D) Notice to home loan applicants.--A
copy of the following notice, which shall
include the name, address, and telephone number
of each consumer reporting agency providing a
credit score that was used:
`` `notice to the home loan applicant
`` `In connection with your application for a home loan,
the lender must disclose to you the score that a consumer
reporting agency distributed to users and the lender used in
connection with your home loan, and the key factors affecting
your credit scores.
`` `The credit score is a computer generated summary
calculated at the time of the request and based on information
that a consumer reporting agency or lender has on file. The
scores are based on data about your credit history and payment
patterns. Credit scores are important because they are used to
assist the lender in determining whether you will obtain a
loan. They may also be used to determine what interest rate you
may be offered on the mortgage. Credit scores can change over
time, depending on your conduct, how your credit history and
payment patterns change, and how credit scoring technologies
change.
`` `Because the score is based on information in your
credit history, it is very important that you review the
credit-related information that is being furnished to make sure
it is accurate. Credit records may vary from one company to
another.
`` `If you have questions about your credit score or the
credit information that is furnished to you, contact the
consumer reporting agency at the address and telephone number
provided with this notice, or contact the lender, if the lender
developed or generated the credit score. The consumer reporting
agency plays no part in the decision to take any action on the
loan application and is unable to provide you with specific
reasons for the decision on a loan application.
`` `If you have questions concerning the terms of the loan,
contact the lender.'.
``(E) Actions not required under this
subsection.--This subsection shall not require
any person to--
``(i) explain the information
provided pursuant to subsection (f);
``(ii) disclose any information
other than a credit score or key
factors, as defined in subsection (f);
``(iii) disclose any credit score
or related information obtained by the
user after a loan has closed;
``(iv) provide more than 1
disclosure per loan transaction; or
``(v) provide the disclosure
required by this subsection when
another person has made the disclosure
to the consumer for that loan
transaction.
``(F) No obligation for content.--
``(i) In general.--The obligation
of any person pursuant to this
subsection shall be limited solely to
providing a copy of the information
that was received from the consumer
reporting agency.
``(ii) Limit on liability.--No
person has liability under this
subsection for the content of that
information or for the omission of any
information within the report provided
by the consumer reporting agency.
``(G) Person defined as excluding
enterprise.--As used in this subsection, the
term `person' does not include an enterprise
(as defined in paragraph (6) of section 1303 of
the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992).
``(2) Prohibition on disclosure clauses null and
void.--
``(A) In general.--Any provision in a
contract that prohibits the disclosure of a
credit score by a person who makes or arranges
loans or a consumer reporting agency is void.
``(B) No liability for disclosure under
this subsection.--A lender shall not have
liability under any contractual provision for
disclosure of a credit score pursuant to this
subsection.''.
(d) Inclusion of Key Factor in Credit Score Information in
Consumer Report.--Section 605(d) of the Fair Credit Reporting
Act (15 U.S.C. 1681c(d)) is amended--
(1) by striking ``Disclosed.--Any consumer
reporting agency'' and inserting ``Disclosed.--
``(1) Title 11 information.--Any consumer reporting
agency''; and
(2) by adding at the end the following new
paragraph:
``(2) Key factor in credit score information.--Any
consumer reporting agency that furnishes a consumer
report that contains any credit score or any other risk
score or predictor on any consumer shall include in the
report a clear and conspicuous statement that a key
factor (as defined in section 609(f)(2)(B)) that
adversely affected such score or predictor was the
number of enquiries, if such a predictor was in fact a
key factor that adversely affected such score. This
paragraph shall not apply to a check services company,
acting as such, which issues authorizations for the
purpose of approving or processing negotiable
instruments, electronic fund transfers, or similar
methods of payments, but only to the extent that such
company is engaged in such activities.''.
(e) Technical and Conforming Amendments.--Section 625(b) of
the Fair Credit Reporting Act (15 U.S.C. 1681t(b)), as so
designated by section 214 of this Act, is amended--
(1) by striking ``or'' at the end of paragraph (2);
and
(2) by striking paragraph (3) and inserting the
following:
``(3) with respect to the disclosures required to
be made under subsection (c), (d), (e), or (g) of
section 609, or subsection (f) of section 609 relating
to the disclosure of credit scores for credit granting
purposes, except that this paragraph--
``(A) shall not apply with respect to
sections 1785.10, 1785.16, and 1785.20.2 of the
California Civil Code (as in effect on the date
of enactment of the Fair and Accurate Credit
Transactions Act of 2003) and section 1785.15
through section 1785.15.2 of such Code (as in
effect on such date);
``(B) shall not apply with respect to
sections 5-3-106(2) and 212-14.3-104.3 of the
Colorado Revised Statutes (as in effect on the
date of enactment of the Fair and Accurate
Credit Transactions Act of 2003); and
``(C) shall not be construed as limiting,
annulling, affecting, or superseding any
provision of the laws of any State regulating
the use in an insurance activity, or regulating
disclosures concerning such use, of a credit-
based insurance score of a consumer by any
person engaged in the business of insurance;
``(4) with respect to the frequency of any
disclosure under section 612(a), except that this
paragraph shall not apply--
``(A) with respect to section 12-14.3-
105(1)(d) of the Colorado Revised Statutes (as
in effect on the date of enactment of the Fair
and Accurate Credit Transactions Act of 2003);
``(B) with respect to section 10-1-
393(29)(C) of the Georgia Code (as in effect on
the date of enactment of the Fair and Accurate
Credit Transactions Act of 2003);
``(C) with respect to section 1316.2 of
title 10 of the Maine Revised Statutes (as in
effect on the date of enactment of the Fair and
Accurate Credit Transactions Act of 2003);
``(D) with respect to sections 14-
1209(a)(1) and 14-1209(b)(1)(i) of the
Commercial Law Article of the Code of Maryland
(as in effect on the date of enactment of the
Fair and Accurate Credit Transactions Act of
2003);
``(E) with respect to section 59(d) and
section 59(e) of chapter 93 of the General Laws
of Massachusetts (as in effect on the date of
enactment of the Fair and Accurate Credit
Transactions Act of 2003);
``(F) with respect to section 56:11-
37.10(a)(1) of the New Jersey Revised Statutes
(as in effect on the date of enactment of
theFair and Accurate Credit Transactions Act of 2003); or
``(G) with respect to section 2480c(a)(1)
of title 9 of the Vermont Statutes Annotated
(as in effect on the date of enactment of the
Fair and Accurate Credit Transactions Act of
2003); or''.
SEC. 213. ENHANCED DISCLOSURE OF THE MEANS AVAILABLE TO OPT OUT OF
PRESCREENED LISTS.
(a) Notice and Response Format for Users of Reports.--
Section 615(d)(2) of the Fair Credit Reporting Act (15 U.S.C.
1681m(d)(2)) is amended to read as follows:
``(2) Disclosure of address and telephone number;
format.--A statement under paragraph (1) shall--
``(A) include the address and toll-free
telephone number of the appropriate
notification system established under section
604(e); and
``(B) be presented in such format and in
such type size and manner as to be simple and
easy to understand, as established by the
Commission, by rule, in consultation with the
Federal banking agencies and the National
Credit Union Administration.''.
(b) Rulemaking Schedule.--Regulations required by section
615(d)(2) of the Fair Credit Reporting Act, as amended by this
section, shall be issued in final form not later than 1 year
after the date of enactment of this Act.
(c) Duration of Elections.--Section 604(e) of the Fair
Credit Reporting Act (15 U.S.C. 1681b(e)) is amended in each of
paragraphs (3)(A) and (4)(B)(i)), by striking ``2-year period''
each place that term appears and inserting ``5-year period''.
(d) Public Awareness Campaign.--The Commission shall
actively publicize and conspicuously post on its website any
address and the toll-free telephone number established as part
of a notification system for opting out of prescreening under
section 604(e) of the Fair Credit Reporting Act (15 U.S.C.
1681b(e)), and otherwise take measures to increase public
awareness regarding the availability of the right to opt out of
prescreening.
(e) Analysis of Further Restrictions on Offers of Credit or
Insurance.--
(1) In general.--The Board shall conduct a study
of--
(A) the ability of consumers to avoid
receiving written offers of credit or insurance
in connection with transactions not initiated
by the consumer; and
(B) the potential impact that any further
restrictions on providing consumers with such
written offers of credit or insurance would
have on consumers.
(2) Report.--The Board shall submit a report
summarizing the results of the study required under
paragraph (1) to the Congress not later than 12 months
after the date of enactment of this Act, together with
such recommendations for legislative or administrative
action as the Board may determine to be appropriate.
(3) Content of report.--The report described in
paragraph (2) shall address the following issues:
(A) The current statutory or voluntary
mechanisms that are available to a consumer to
notify lenders and insurance providers that the
consumer does not wish to receive written
offers of credit or insurance.
(B) The extent to which consumers are
currently utilizing existing statutory and
voluntary mechanisms to avoid receiving offers
of credit or insurance.
(C) The benefits provided to consumers as a
result of receiving written offers of credit or
insurance.
(D) Whether consumers incur significant
costs or are otherwise adversely affected by
the receipt of written offers of credit or
insurance.
(E) Whether further restricting the ability
of lenders and insurers to provide written
offers of credit or insurance to consumers
would affect--
(i) the cost consumers pay to
obtain credit or insurance;
(ii) the availability of credit or
insurance;
(iii) consumers' knowledge about
new or alternative products and
services;
(iv) the ability of lenders or
insurers to compete with one another;
and
(v) the ability to offer credit or
insurance products to consumers who
have been traditionally underserved.
SEC. 214. AFFILIATE SHARING.
(a) Limitation.--The Fair Credit Reporting Act (15 U.S.C.
1601 et seq.) is amended--
(1) by redesignating sections 624 (15 U.S.C.
1681t), 625 (15 U.S.C. 1681u), and 626 (15 U.S.C.
6181v) as sections 625, 626, and 627, respectively; and
(2) by inserting after section 623 the following:
``Sec. 624. Affiliate sharing
``(a) Special Rule for Solicitation for Purposes of
Marketing.--
``(1) Notice.--Any person that receives from
another person related to it by common ownership or
affiliated by corporate control a communication of
information that would be a consumer report, but for
clauses (i), (ii), and (iii) of section 603(d)(2)(A),
may not use the information to make a solicitation for
marketing purposes to a consumer about its products or
services, unless--
``(A) it is clearly and conspicuously
disclosed to the consumer that the information
may be communicated among such persons for
purposes of making such solicitations to the
consumer; and
``(B) the consumer is provided an
opportunity and a simple method to prohibit the
making of such solicitations to the consumer by
such person.
``(2) Consumer choice.--
``(A) In general.--The notice required
under paragraph (1) shall allow the consumer
the opportunity to prohibit all solicitations
referred to in such paragraph, and may allow
the consumer to choose from different options
when electing to prohibit the sending of such
solicitations, including options regarding the
types of entities and information covered, and
which methods of delivering solicitations the
consumer elects to prohibit.
``(B) Format.--Notwithstanding subparagraph
(A), the notice required under paragraph (1)
shall be clear, conspicuous, and concise, and
any method provided under paragraph (1)(B)
shall be simple. The regulations prescribed to
implement this section shall provide specific
guidance regarding how to comply with such
standards.
``(3) Duration.--
``(A) In general.--The election of a
consumer pursuant to paragraph (1)(B) to
prohibit the making of solicitations shall be
effective for at least 5 years, beginning on
the date on which the person receives the
election of the consumer, unless the consumer
requests that such election be revoked.
``(B) Notice upon expiration of effective
period.--At such time as the election of a
consumer pursuant to paragraph (1)(B) is no
longer effective, a person may not use
information that the person receives in the
manner described in paragraph (1) to make any
solicitation for marketing purposes to the
consumer, unless the consumer receives a notice
and an opportunity, using a simple method, to
extend the opt-out for another period of at
least 5 years, pursuant to the procedures
described in paragraph (1).
``(4) Scope.--This section shall not apply to a
person--
``(A) using information to make a
solicitation for marketing purposes to a
consumer with whom the person has a pre-
existing business relationship;
``(B) using information to facilitate
communications to an individual for whose
benefit the person provides employee benefit or
other services pursuant to a contract with an
employer related to and arising out of the
current employment relationship or status of
the individual as a participant or beneficiary
of an employee benefit plan;
``(C) using information to perform services
on behalf of another person related by common
ownership or affiliated by corporate control,
except that this subparagraph shall not be
construed as permitting a person to send
solicitations on behalf of another person, if
such other person would not be permitted to
send the solicitation on its own behalf as a
result of the election of the consumer to
prohibit solicitations under paragraph (1)(B);
``(D) using information in response to a
communication initiated by the consumer;
``(E) using information in response to
solicitations authorized or requested by the
consumer; or
``(F) if compliance with this section by
that person would prevent compliance by that
person with any provision of State insurance
laws pertaining to unfair discrimination in any
State in which the person is lawfully doing
business.
``(5) No retroactivity.--This subsection shall not
prohibit the use of information to send a solicitation
to a consumer if such information was received prior to
the date on which persons are required to comply with
regulations implementing this subsection.
``(b) Notice for Other Purposes Permissible.--A notice or
other disclosure under this section may be coordinated and
consolidated with any other notice required to be issued under
any other provision of law by a person that is subject to this
section, and a notice or other disclosure that is equivalent to
the notice required by subsection (a), and that is provided by
a person described in subsection (a) to a consumer together
with disclosures required by any other provision of law, shall
satisfy the requirements of subsection (a).
``(c) User Requirements.--Requirements with respect to the
use by a person of information received from another person
related to it by common ownership or affiliated by corporate
control, such as the requirements of this section, constitute
requirements with respect to the exchange of information among
persons affiliated by common ownership or common corporate
control, within the meaning of section 625(b)(2).
``(d) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) Pre-existing business relationship.--The term
`pre-existing business relationship' means a
relationship between a person, or a person's licensed
agent, and a consumer, based on--
``(A) a financial contract between a person
and a consumer which is in force;
``(B) the purchase, rental, or lease by the
consumer of that person's goods or services, or
a financial transaction (including holding an
active account or a policy in force or having
another continuing relationship) between the
consumer and that person during the 18-month
period immediately preceding the date on which
the consumer is sent a solicitation covered by
this section;
``(C) an inquiry or application by the
consumer regarding a product or service offered
by that person, during the 3-month period
immediately preceding the date on which the
consumer is sent a solicitation covered by this
section; or
``(D) any other pre-existing customer
relationship defined in the regulations
implementing this section.
``(2) Solicitation.--The term `solicitation' means
the marketing of a product or service initiated by a
person to a particular consumer that is based on an
exchange of information described in subsection (a),
and is intended to encourage the consumer to purchase
such product or service, but does not include
communications that are directed at the general public
or determined not to be a solicitation by the
regulations prescribed under this section.''.
(b) Rulemaking Required.--
(1) In general.--The Federal banking agencies, the
National Credit Union Administration, and the
Commission, with respect to the entities that are
subject to their respective enforcement authority under
section 621 of the Fair Credit Reporting Act and the
Securities and Exchange Commission, and in coordination
as described in paragraph (2), shall prescribe
regulations to implement section 624 of the Fair Credit
Reporting Act, as added by this section.
(2) Coordination.--Each agency required to
prescribe regulations under paragraph (1) shall consult
and coordinate with each other such agency so that, to
the extent possible, the regulations prescribed by each
such entity are consistent and comparable with the
regulations prescribed by each other such agency.
(3) Considerations.--In promulgating regulations
under this subsection, each agency referred to in
paragraph (1) shall--
(A) ensure that affiliate sharing
notification methods provide a simple means for
consumers to make determinations and choices
under section 624 of the Fair Credit Reporting
Act, as added by this section;
(B) consider the affiliate sharing
notification practices employed on the date of
enactment of this Act by persons that will be
subject to that section 624; and
(C) ensure that notices and disclosures may
be coordinated and consolidated, as provided in
subsection (b) of that section 624.
(4) Timing.--Regulations required by this
subsection shall--
(A) be issued in final form not later than
9 months after the date of enactment of this
Act; and
(B) become effective not later than 6
months after the date on which they are issued
in final form.
(c) Technical and Conforming Amendments.--
(1) Definitions.--Section 603(d)(2)(A) of the Fair
Credit Reporting Act (15 U.S.C. 1681(d)(2)(A)) is
amended by inserting ``subject to section 624,'' after
``(A)''.
(2) Relation to state laws.--Section 625(b)(1) of
the Fair Credit Reporting Act (15 U.S.C. 1681t(b)(1)),
as so designated by subsection (a) of this section, is
amended--
(A) by striking ``or'' after the semicolon
at the end of subparagraph (E); and
(B) by adding at the end the following new
subparagraph:
``(H) section 624, relating to the exchange
and use of information to make a solicitation
for marketing purposes; or''.
(3) Cross reference correction.--Section 627(d) of
the Fair Credit Reporting Act (15 U.S.C. 1681v(d)), as
so designated by subsection (a) of this section, is
amended by striking ``section 625'' and inserting
``section 626''.
(4) Table of sections.--The table of sections for
title VI of the Consumer Credit Protection Act (15
U.S.C. 1601 et seq.) is amended by striking the items
relating to sections 624 through 626 and inserting the
following:
``624. Affiliate sharing.
``625. Relation to State laws.
``626. Disclosures to FBI for counterintelligence purposes.
``627. Disclosures to governmental agencies for counterintelligence
purposes.''
(e) Studies of Information Sharing Practices.--
(1) In general.--The Federal banking agencies, the
National Credit Union Administration, and the
Commission shall jointly conduct regular studies of the
consumer information sharing practices by financial
institutions and other persons that are creditors or
users of consumer reports with their affiliates.
(2) Matters for study.--In conducting the studies
required by paragraph (1), the agencies described in
paragraph (1) shall--
(A) identify--
(i) the purposes for which
financial institutions and other
creditors and users of consumer reports
share consumer information;
(ii) the types of information
shared by such entities with their
affiliates;
(iii) the number of choices
provided to consumers with respect to
the control of such sharing, and the
degree to and manner in which consumers
exercise such choices, if at all; and
(iv) whether such entities share or
may share personally identifiable
transaction or experience information
with affiliates for purposes--
(I) that are related to
employment or hiring, including
whether the person that is the
subject of such information is
given notice of such sharing,
and the specific uses of such
shared information; or
(II) of general publication
of such information; and
(B) specifically examine the information
sharing practices that financial institutions
and other creditors and users of consumer
reports and their affiliates employ for the
purpose of making underwriting decisions or
credit evaluations of consumers.
(3) Reports.--
(A) Initial report.--Not later than 3 years
after the date of enactment of this Act, the
Federal banking agencies, the National Credit
Union Administration, and the Commission shall
jointly submit a report to the Congress on the
results of the initial study conducted in
accordance with this subsection, together with
any recommendations for legislative or
regulatory action.
(B) Followup reports.--The Federal banking
agencies, the National Credit Union
Administration, and the Commission shall, not
less frequently than once every 3 years
following the date of submission of the initial
report under subparagraph (A), jointly submit a
report to the Congress that, together with any
recommendations for legislative or regulatory
action--
(i) documents any changes in the
areas of study referred to in paragraph
(2)(A) occurring since the date of
submission of the previous report;
(ii) identifies any changes in the
practices of financial institutions and
other creditors and users of consumer
reports in sharing consumer information
with their affiliates for the purpose
of making underwriting decisions or
credit evaluations of consumers
occurring since the date of submission
of the previous report; and
(iii) examines the effects that
changes described in clause (ii) have
had, if any, on the degree to which
such affiliate sharing practices reduce
the need for financial institutions,
creditors, and other users of consumer
reports to rely on consumer reports for
such decisions.
SEC. 215. STUDY OF EFFECTS OF CREDIT SCORES AND CREDIT-BASED INSURANCE
SCORES ON AVAILABILITY AND AFFORDABILITY OF
FINANCIAL PRODUCTS.
(a) Study Required.--The Commission and the Board, in
consultation with the Office of Fair Housing and Equal
Opportunity of the Department of Housing and Urban Development,
shall conduct a study of--
(1) the effects of the use of credit scores and
credit-based insurance scores on the availability and
affordability of financial products and services,
including credit cards, mortgages, auto loans, and
property and casualty insurance;
(2) the statistical relationship, utilizing a
multivariate analysis that controls for prohibited
factors under the Equal Credit Opportunity Act and
other known risk factors, between credit scores and
credit-based insurance scores and the quantifiable
risks and actual losses experienced by businesses;
(3) the extent to which, if any, the use of credit
scoring models, credit scores, and credit-based
insurance scores impact on the availability and
affordability of credit and insurance to the extent
information is currently available or is available
through proxies, by geography, income, ethnicity, race,
color, religion, national origin, age, sex, marital
status, and creed, including the extent to which the
consideration or lack of consideration of certain
factors by credit scoring systems could result in
negative or differential treatment of protected classes
under the Equal Credit Opportunity Act, and the extent
to which, if any, the use of underwriting systems
relying on these models could achieve comparable
results through the use of factors with less negative
impact; and
(4) the extent to which credit scoring systems are
used by businesses, the factors considered by such
systems, and the effects of variables which are not
considered by such systems.
(b) Public Participation.--The Commission shall seek public
input about the prescribed methodology and research design of
the study described in subsection (a), including from relevant
Federal regulators, State insurance regulators, community,
civil rights, consumer, and housing groups.
(c) Report Required.--
(1) In general.--Before the end of the 24-month
period beginning on the date of enactment of this Act,
the Commission shall submit a detailed report on the
study conducted pursuant to subsection (a) to the
Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate.
(2) Contents of report.--The report submitted under
paragraph (1) shall include the findings and
conclusions of the Commission, recommendations to
address specific areas of concerns addressed in the
study, and recommendations for legislative or
administrative action that the Commission may determine
to be necessary to ensure that credit and credit-based
insurance scores are used appropriately and fairly to
avoid negative effects.
SEC. 216. DISPOSAL OF CONSUMER REPORT INFORMATION AND RECORDS.
(a) In General.--The Fair Credit Reporting Act (15 U.S.C.
1681 et seq.), as amended by this Act, is amended by adding at
the end the following:
``Sec. 628. Disposal of records
``(a) Regulations.--
``(1) In general.--Not later than 1 year after the
date of enactment of this section, the Federal banking
agencies, the National Credit Union Administration, and
the Commission with respect to the entities that are
subject to their respective enforcement authority under
section 621, and the Securities and Exchange
Commission, and in coordination as described in
paragraph (2), shall issue final regulations requiring
any person that maintains or otherwise possesses
consumer information, or any compilation of consumer
information, derived from consumer reports for a
business purpose to properly dispose of any such
information or compilation.
``(2) Coordination.--Each agency required to
prescribe regulations under paragraph (1) shall--
``(A) consult and coordinate with each
other such agency so that, to the extent
possible, the regulations prescribed by each
such agency are consistent and comparable with
the regulations by each such other agency; and
``(B) ensure that such regulations are
consistent with the requirements and
regulations issued pursuant to Public Law 106-
102 and other provisions of Federal law.
``(3) Exemption authority.--In issuing regulations
under this section, the Federal banking agencies, the
National Credit Union Administration, the Commission,
and the Securities and Exchange Commission may exempt
any person or class of persons from application of
those regulations, as such agency deems appropriate to
carry out the purpose of this section.
``(b) Rule of Construction.--Nothing in this section shall
be construed--
``(1) to require a person to maintain or destroy
any record pertaining to a consumer that is not imposed
under other law; or
``(2) to alter or affect any requirement imposed
under any other provision of law to maintain or destroy
such a record.''.
(b) Clerical Amendment.--The table of sections for title VI
of the Consumer Credit Protection Act (15 U.S.C. 1601 et seq.)
is amended by inserting after the item relating to section 627,
as added by section 214 of this Act, the following:
``628. Disposal of records.
``629. Corporate and technological circumvention prohibited.''.
SEC. 217. REQUIREMENT TO DISCLOSE COMMUNICATIONS TO A CONSUMER
REPORTING AGENCY.
(a) In General.--Section 623(a) of the Fair Credit
Reporting Act (15 U.S.C. 1681s-2(a)) as amended by this Act, is
amended by inserting after paragraph (6), the following new
paragraph:
``(7) Negative information.--
``(A) Notice to consumer required.--
``(i) In general.--If any financial
institution that extends credit and
regularly and in the ordinary course of
business furnishes information to a
consumer reporting agency described in
section 603(p) furnishes negative
information to such an agency regarding
credit extended to a customer, the
financial institution shall provide a
notice of such furnishing of negative
information, in writing, to the
customer.
``(ii) Notice effective for
subsequent submissions.--After
providing such notice, the financial
institution may submit additional
negative information to a consumer
reporting agency described in section
603(p) with respect to the same
transaction, extension of credit,
account, or customer without providing
additional notice to the customer.
``(B) Time of notice.--
``(i) In general.--The notice
required under subparagraph (A) shall
be provided to the customer prior to,
or no later than 30 days after,
furnishing the negative information to
a consumer reporting agency described
in section 603(p).
``(ii) Coordination with new
account disclosures.--If the notice is
provided to the customer prior to
furnishing the negative information to
a consumer reporting agency, the notice
may not be included in the initial
disclosures providedunder section
127(a) of the Truth in Lending Act.
``(C) Coordination with other
disclosures.--The notice required under
subparagraph (A)--
``(i) may be included on or with
any notice of default, any billing
statement, or any other materials
provided to the customer; and
``(ii) must be clear and
conspicuous.
``(D) Model disclosure.--
``(i) Duty of board to prepare.--
The Board shall prescribe a brief model
disclosure a financial institution may
use to comply with subparagraph (A),
which shall not exceed 30 words.
``(ii) Use of model not required.--
No provision of this paragraph shall be
construed as requiring a financial
institution to use any such model form
prescribed by the Board.
``(iii) Compliance using model.--A
financial institution shall be deemed
to be in compliance with subparagraph
(A) if the financial institution uses
any such model form prescribed by the
Board, or the financial institution
uses any such model form and rearranges
its format.
``(E) Use of notice without submitting
negative information.--No provision of this
paragraph shall be construed as requiring a
financial institution that has provided a
customer with a notice described in
subparagraph (A) to furnish negative
information about the customer to a consumer
reporting agency.
``(F) Safe harbor.--A financial institution
shall not be liable for failure to perform the
duties required by this paragraph if, at the
time of the failure, the financial institution
maintained reasonable policies and procedures
to comply with this paragraph or the financial
institution reasonably believed that the
institution is prohibited, by law, from
contacting the consumer.
``(G) Definitions.--For purposes of this
paragraph, the following definitions shall
apply:
``(i) Negative information.--The
term `negative information' means
information concerning a customer's
delinquencies, late payments,
insolvency, or any form of default.
``(ii) Customer; financial
institution.--The terms `customer' and
`financial institution' have the same
meanings as in section 509 Public Law
106-102.''.
(b) Model Disclosure Form.--Before the end of the 6-month
period beginning on the date of enactment of this Act, the
Board shall adopt the model disclosure required under the
amendment made by subsection (a) after notice duly given in the
Federal Register and an opportunity for public comment in
accordance with section 553 of title 5, United States Code.
TITLE III--ENHANCING THE ACCURACY OF CONSUMER REPORT INFORMATION
SEC. 311. RISK-BASED PRICING NOTICE.
(a) Duties of Users.--Section 615 of the Fair Credit
Reporting Act (15 U.S.C. 1681m), as amended by this Act, is
amended by adding at the end the following:
``(h) Duties of Users in Certain Credit Transactions.--
``(1) In general.--Subject to rules prescribed as
provided in paragraph (6), if any person uses a
consumer report in connection with an application for,
or a grant, extension, or other provision of, credit on
material terms that are materially less favorable than
the most favorable terms available to a substantial
proportion of consumers from or through that person,
based in whole or in part on a consumer report, the
person shall provide an oral, written, or electronic
notice to the consumer in the form and manner required
by regulations prescribed in accordance with this
subsection.
``(2) Timing.--The notice required under paragraph
(1) may be provided at the time of an application for,
or a grant, extension, or other provision of, credit or
the time of communication of an approval of an
application for, or grant, extension, or other
provision of, credit, except as provided in the
regulations prescribed under paragraph (6).
``(3) Exceptions.--No notice shall be required from
a person under this subsection if--
``(A) the consumer applied for specific
material terms and was granted those terms,
unless those terms were initially specified by
the person after the transaction was initiated
by the consumer and after the person obtained a
consumer report; or
``(B) the person has provided or will
provide a notice to the consumer under
subsection (a) in connection with the
transaction.
``(4) Other notice not sufficient.--A person that
is required to provide a notice under subsection (a)
cannot meet that requirement by providing a notice
under this subsection.
``(5) Content and delivery of notice.--A notice
under this subsection shall, at a minimum--
``(A) include a statement informing the
consumer that the terms offered to the consumer
are set based on information from a consumer
report;
``(B) identify the consumer reporting
agency furnishing the report;
``(C) include a statement informing the
consumer that the consumer may obtain a copy of
a consumer report from that consumer reporting
agency without charge; and
``(D) include the contact information
specified by that consumer reporting agency for
obtaining such consumer reports (including a
toll-free telephone number established by the
agency in the case of a consumer reporting
agency described in section 603(p)).
``(6) Rulemaking.--
``(A) Rules required.--The Commission and
the Board shall jointly prescribe rules.
``(B) Content.--Rules required by
subparagraph (A) shall address, but are not
limited to--
``(i) the form, content, time, and
manner of delivery of any notice under
this subsection;
``(ii) clarification of the meaning
of terms used in this subsection,
including what credit terms are
material, and when credit terms are
materially less favorable;
``(iii) exceptions to the notice
requirement under this subsection for
classes of persons or transactions
regarding which the agencies determine
that notice would not significantly
benefit consumers;
``(iv) a model notice that may be
used to comply with this subsection;
and
``(v) the timing of the notice
required under paragraph (1), including
the circumstances under which the
notice must be provided after the terms
offered to the consumer were set based
on information from a consumer report.
``(7) Compliance.--A person shall not be liable for
failure to perform the duties required by this section
if, at the time of the failure, the person maintained
reasonable policies and procedures to comply with this
section.
``(8) Enforcement.--
``(A) No civil actions.--Sections 616 and
617 shall not apply to any failure by any
person to comply with this section.
``(B) Administrative enforcement.--This
section shall be enforced exclusively under
section 621 by the Federal agencies and
officials identified in that section.''.
(b) Relation to State Laws.--Section 625(b)(1) of the Fair
Credit Reporting Act (15 U.S.C. 1681t(b)(1)), as so designated
by section 214 of this Act, is amended by adding at the end the
following:
``(I) section 615(h), relating to the
duties of users of consumer reports to provide
notice with respect to terms in certain credit
transactions;''.
SEC. 312. PROCEDURES TO ENHANCE THE ACCURACY AND INTEGRITY OF
INFORMATION FURNISHED TO CONSUMER REPORTING
AGENCIES.
(a) Accuracy Guidelines and Regulations.--Section 623 of
the Fair Credit Reporting Act (15 U.S.C.15 U.S.C. 1681s-2) is
amended by adding at the end the following:
``(e) Accuracy Guidelines and Regulations Required.--
``(1) Guidelines.--The Federal banking agencies,
the National Credit Union Administration, and the
Commission shall, with respect to the entities that are
subject to their respective enforcement authority under
section 621, and in coordination as described in
paragraph (2)--
``(A) establish and maintain guidelines for
use by each person that furnishes information
to a consumer reporting agency regarding the
accuracy and integrity of the information
relating to consumers that such entities
furnish to consumer reporting agencies, and
update such guidelines as often as necessary;
and
``(B) prescribe regulations requiring each
person that furnishes information to a consumer
reporting agency to establish reasonable
policies and procedures for implementing the
guidelines established pursuant to subparagraph
(A).
``(2) Coordination.--Each agency required to
prescribe regulations under paragraph (1) shall consult
and coordinate with each other such agency so that, to
the extent possible, the regulations prescribed by each
such entity are consistent and comparable with the
regulations prescribed by each other such agency.
``(3) Criteria.--In developing the guidelines
required by paragraph (1)(A), the agencies described in
paragraph (1) shall--
``(A) identify patterns, practices, and
specific forms of activity that can compromise
the accuracy and integrity of information
furnished to consumer reporting agencies;
``(B) review the methods (including
technological means) used to furnish
information relating to consumers to consumer
reporting agencies;
``(C) determine whether persons that
furnish information to consumer reporting
agencies maintain and enforce policies to
assure the accuracy and integrity of
information furnished to consumer reporting
agencies; and
``(D) examine the policies and processes
that persons that furnish information to
consumer reporting agencies employ to conduct
reinvestigations and correct inaccurate
information relating to consumers that has been
furnished to consumer reporting agencies.''.
(b) Duty of Furnishers To Provide Accurate Information.--
Section 623(a)(1) of the Fair Credit Reporting Act (15 U.S.C.
1681s-2(a)(1)) is amended--
(1) in subparagraph (A), by striking ``knows or
consciously avoids knowing that the information is
inaccurate'' and inserting ``knows or has reasonable
cause to believe that the information is inaccurate'';
and
(2) by adding at the end the following:
``(D) Definition.--For purposes of
subparagraph (A), the term `reasonable cause to
believe that the information is inaccurate'
means having specific knowledge, other than
solely allegations by the consumer, that would
cause a reasonable person to have substantial
doubts about the accuracy of the
information.''.
(c) Ability of Consumer To Dispute Information Directly
With Furnisher.--Section 623(a) of the Fair Credit Reporting
Act (15 U.S.C. 1681s-2(a)), as amended by this Act, is amended
by adding at the end the following:
``(8) Ability of consumer to dispute information
directly with furnisher.--
``(A) In general.--The Federal banking
agencies, the National Credit Union
Administration, and the Commission shall
jointly prescribe regulations that shall
identify the circumstances under which a
furnisher shall be required to reinvestigate a
dispute concerning the accuracy of information
contained in a consumer report on the consumer,
based on a direct request of a consumer.
``(B) Considerations.--In prescribing
regulations under subparagraph (A), the
agencies shall weigh--
``(i) the benefits to consumers
with the costs on furnishers and the
credit reporting system;
``(ii) the impact on the overall
accuracy and integrity of consumer
reports of any such requirements;
``(iii) whether direct contact by
the consumer with the furnisher would
likely result in the most expeditious
resolution of any such dispute; and
``(iv) the potential impact on the
credit reporting process if credit
repair organizations, as defined in
section 403(3), including entities that
would be a credit repair organization,
but for section 403(3)(B)(i), are able
to circumvent the prohibition in
subparagraph (G).
``(C) Applicability.--Subparagraphs (D)
through (G) shall apply in any circumstance
identified under the regulations promulgated
under subparagraph (A).
``(D) Submitting a notice of dispute.--A
consumer who seeks to dispute the accuracy of
information shall provide a dispute notice
directly to such person at the address
specified by the person for such notices that--
``(i) identifies the specific
information that is being disputed;
``(ii) explains the basis for the
dispute; and
``(iii) includes all supporting
documentation required by the furnisher
to substantiate the basis of the
dispute.
``(E) Duty of person after receiving notice
of dispute.--After receiving a notice of
dispute from a consumer pursuant to
subparagraph (D), the person that provided the
information in dispute to a consumer reporting
agency shall--
``(i) conduct an investigation with
respect to the disputed information;
``(ii) review all relevant
information provided by the consumer
with the notice;
``(iii) complete such person's
investigation of the dispute and report
the results of the investigation to the
consumer before the expiration of the
period under section 611(a)(1) within
which a consumer reporting agency would
be required to complete its action if
the consumer had elected to dispute the
information under that section; and
``(iv) if the investigation finds
that the information reported was
inaccurate, promptly notify each
consumer reporting agency to which the
person furnished the inaccurate
information of that determination and
provide to the agency any correction to
that information that is necessary to
make the information provided by the
person accurate.
``(F) Frivolous or irrelevant dispute.--
``(i) In general.--This paragraph
shall not apply if the person receiving
a notice of a dispute from a consumer
reasonably determines that the dispute
is frivolous or irrelevant, including--
``(I) by reason of the
failure of a consumer to
provide sufficient information
to investigate the disputed
information; or
``(II) the submission by a
consumer of a dispute that is
substantially the same as a
dispute previously submitted by
or for the consumer, either
directly to the person or
through a consumer reporting
agency under subsection (b),
with respect to which the
person has already performed
the person's duties under this
paragraph or subsection (b), as
applicable.
``(ii) Notice of determination.--
Upon making any determination under
clause (i) that a dispute is frivolous
or irrelevant, the person shall notify
the consumer of such determination not
later than 5 business days after making
such determination, by mail or, if
authorized by the consumer for that
purpose, by any other means available
to the person.
``(iii) Contents of notice.--A
notice under clause (ii) shall
include--
``(I) the reasons for the
determination under clause (i);
and
``(II) identification of
any information required to
investigate the disputed
information, which may consist
of a standardized form
describing the general nature
of such information.
``(G) Exclusion of credit repair
organizations.--This paragraph shall not apply
if the notice of the dispute is submitted by,
is prepared on behalf of the consumer by, or is
submitted on a form supplied to the consumer
by, a credit repair organization, as defined in
section 403(3), or an entity that would be a
credit repair organization, but for section
403(3)(B)(i).''.
(d) Furnisher Liability Exception.--Section 623(a)(5) of
the Fair Credit Reporting Act (15 U.S.C. 1681s-2(a)(5)) is
amended--
(1) by striking ``A person'' and inserting the
following:
``(A) In general.--A person'';
(2) by inserting ``date of delinquency on the
account, which shall be the'' before ``month'';
(3) by inserting ``on the account'' before ``that
immediately preceded''; and
(4) by adding at the end the following:
``(B) Rule of construction.--For purposes
of this paragraph only, and provided that the
consumer does not dispute the information, a
person that furnishes information on a
delinquent account that is placed for
collection, charged for profit or loss, or
subjected to any similar action, complies with
this paragraph, if--
``(i) the person reports the same
date of delinquency as that provided by
the creditor to which the account was
owed at the time at which the
commencement of the delinquency
occurred, if the creditor previously
reported that date of delinquency to a
consumer reporting agency;
``(ii) the creditor did not
previously report the date of
delinquency to a consumer reporting
agency, and the person establishes and
follows reasonable procedures to obtain
the date of delinquency from the
creditor or another reliable source and
reports that date to a consumer
reporting agency as the date of
delinquency; or
``(iii) the creditor did not
previously report the date of
delinquency to a consumer reporting
agency and the date of delinquency
cannot be reasonably obtained as
provided in clause (ii), the person
establishes and follows reasonable
procedures to ensure the date reported
as the date of delinquency precedes the
date on which the account is placed for
collection, charged to profit or loss,
or subjected to any similar action, and
reports such date to the credit
reporting agency.''.
(e) Liability and Enforcement.--
(1) Civil liability.--Section 623 of the Fair
Credit Reporting Act (15 U.S.C. 1681s-2) is amended by
striking subsections (c) and (d) and inserting the
following:
``(c) Limitation on Liability.--Except as provided in
section 621(c)(1)(B), sections 616 and 617 do not apply to any
violation of--
``(1) subsection (a) of this section, including any
regulations issued thereunder;
``(2) subsection (e) of this section, except that
nothing in this paragraph shall limit, expand, or
otherwise affect liability under section 616 or 617, as
applicable, for violations of subsection (b) of this
section; or
``(3) subsection (e) of section 615.
``(d) Limitation on Enforcement.--The provisions of law
described in paragraphs (1) through (3) of subsection (c)
(other than with respect to the exception described in
paragraph (2) of subsection (c)) shall be enforced exclusively
as provided under section 621 by the Federal agencies and
officials and the State officials identified in section 621.''.
(2) State actions.--Section 621(c) of the Fair
Credit Reporting Act (15 U.S.C. 1681s(c)) is amended--
(A) in paragraph (1)(B)(ii), by striking
``of section 623(a)'' and inserting ``described
in anyof paragraphs (1) through (3) of section
623(c)''; and
(B) in paragraph (5)--
(i) in each of subparagraphs (A)
and (B), by striking ``of section
623(a)(1)'' each place that term
appears and inserting ``described in
any of paragraphs (1) through (3) of
section 623(c)''; and
(ii) by amending the paragraph
heading to read as follows:
``(5) Limitations on state actions for certain
violations.--''.
(f) Rule of Construction.--Nothing in this section, the
amendments made by this section, or any other provision of this
Act shall be construed to affect any liability under section
616 or 617 of the Fair Credit Reporting Act (15 U.S.C. 1681n,
1681o) that existed on the day before the date of enactment of
this Act.
SEC. 313. FTC AND CONSUMER REPORTING AGENCY ACTION CONCERNING
COMPLAINTS.
(a) In General.--Section 611 of the Fair Credit Reporting
Act (15 U.S.C. 1681i) is amended by adding at the end the
following:
``(e) Treatment of Complaints and Report to Congress.--
``(1) In general.--The Commission shall--
``(A) compile all complaints that it
receives that a file of a consumer that is
maintained by a consumer reporting agency
described in section 603(p) contains incomplete
or inaccurate information, with respect to
which, the consumer appears to have disputed
the completeness or accuracy with the consumer
reporting agency or otherwise utilized the
procedures provided by subsection (a); and
``(B) transmit each such complaint to each
consumer reporting agency involved.
``(2) Exclusion.--Complaints received or obtained
by the Commission pursuant to its investigative
authority under the Federal Trade Commission Act shall
not be subject to paragraph (1).
``(3) Agency responsibilities.--Each consumer
reporting agency described in section 603(p) that
receives a complaint transmitted by the Commission
pursuant to paragraph (1) shall--
``(A) review each such complaint to
determine whether all legal obligations imposed
on the consumer reporting agency under this
title (including any obligation imposed by an
applicable court or administrative order) have
been met with respect to the subject matter of
the complaint;
``(B) provide reports on a regular basis to
the Commission regarding the determinations of
and actions taken by the consumer reporting
agency, if any, in connection with its review
of such complaints; and
``(C) maintain, for a reasonable time
period, records regarding the disposition of
each such complaint that is sufficient to
demonstrate compliance with this subsection.
``(4) Rulemaking authority.--The Commission may
prescribe regulations, as appropriate to implement this
subsection.
``(5) Annual report.--The Commission shall submit
to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services
of the House of Representatives an annual report
regarding information gathered by the Commission under
this subsection.''.
(b) Prompt Investigation of Disputed Consumer
Information.--
(1) Study required.--The Board and the Commission
shall jointly study the extent to which, and the manner
in which, consumer reporting agencies and furnishers of
consumer information to consumer reporting agencies are
complying with the procedures, time lines, and
requirements under the Fair Credit Reporting Act for
the prompt investigation of the disputed accuracy of
any consumer information, the completeness of the
information provided to consumer reporting agencies,
and the prompt correction or deletion, in accordance
with such Act, of any inaccurate or incomplete
information or information that cannot be verified.
(2) Report required.--Before the end of the 12-
month period beginning on the date of enactment of this
Act, the Board and the Commission shall jointly submit
a progress report to the Congress on the results of the
study required under paragraph (1).
(3) Considerations.--In preparing the report
required under paragraph (2), the Board and the
Commission shall consider information relating to
complaints compiled by the Commission under section
611(e) of the Fair Credit Reporting Act, as added by
this section.
(4) Recommendations.--The report required under
paragraph (2) shall include such recommendations as the
Board and the Commission jointly determine to be
appropriate for legislative or administrative action,
to ensure that--
(A) consumer disputes with consumer
reporting agencies over the accuracy or
completeness of information in a consumer's
file are promptly and fully investigated and
any incorrect, incomplete, or unverifiable
information is corrected or deleted immediately
thereafter;
(B) furnishers of information to consumer
reporting agencies maintain full and prompt
compliance with the duties and responsibilities
established under section 623 of the Fair
Credit Reporting Act; and
(C) consumer reporting agencies establish
and maintain appropriate internal controls and
management review procedures for maintaining
full and continuous compliance with the
procedures, time lines, and requirements under
the Fair Credit Reporting Act for the prompt
investigation of the disputed accuracy of any
consumer information and the prompt correction
or deletion, in accordance with such Act, of
any inaccurate or incomplete information or
information that cannot be verified.
SEC. 314. IMPROVED DISCLOSURE OF THE RESULTS OF REINVESTIGATION.
(a) In General.--Section 611(a)(5)(A) of the Fair Credit
Reporting Act (15 U.S.C. 1681i(a)(5)(A)) is amended by striking
``shall'' and all that follows through the end of the
subparagraph, and inserting the following: ``shall--
``(i) promptly delete that item of
information from the file of the
consumer, or modify that item of
information, as appropriate, based on
the results of the reinvestigation; and
``(ii) promptly notify the
furnisher of that information that the
information has been modified or
deleted from the file of the
consumer.''.
(b) Furnisher Requirements Relating to Inaccurate,
Incomplete, or Unverifiable Information.--Section 623(b)(1) of
the Fair Credit Reporting Act (15 U.S.C. 1681s-2(b)(1)) is
amended--
(1) in subparagraph (C), by striking ``and'' at the
end; and
(2) in subparagraph (D), by striking the period at
the end and inserting the following: ``; and
``(E) if an item of information disputed by
a consumer is found to be inaccurate or
incomplete or cannot be verified after any
reinvestigation under paragraph (1), for
purposes of reporting to a consumer reporting
agency only, as appropriate, based on the
results of the reinvestigation promptly--
``(i) modify that item of
information;
``(ii) delete that item of
information; or
``(iii) permanently block the
reporting of that item of
information.''.
SEC. 315. RECONCILING ADDRESSES.
Section 605 of the Fair Credit Reporting Act (15 U.S.C.
1681c), as amended by this Act, is amended by adding at the end
the following:
``(h) Notice of Discrepancy in Address.--
``(1) In general.--If a person has requested a
consumer report relating to a consumer from a consumer
reporting agency described in section 603(p), the
request includes an address for the consumer that
substantially differs from the addresses in the file of
the consumer, and the agency provides a consumer report
in response to the request, the consumer reporting
agency shall notify the requester of the existence of
the discrepancy.
``(2) Regulations.--
``(A) Regulations required.--The Federal
banking agencies, the National Credit Union
Administration, and the Commission shall
jointly, with respect to the entities that are
subject to their respective enforcement
authority under section 621, prescribe
regulations providing guidance regarding
reasonable policies and procedures that a user
of a consumer report should employ when such
user has received a notice of discrepancy under
paragraph (1).
``(B) Policies and procedures to be
included.--The regulations prescribed under
subparagraph (A) shall describe reasonable
policies and procedures for use by a user of a
consumer report--
``(i) to form a reasonable belief
that the user knows the identity of the
person to whom the consumer report
pertains; and
``(ii) if the user establishes a
continuing relationship with the
consumer, and the user regularly and in
the ordinary course of business
furnishes information to the consumer
reporting agency from which the notice
of discrepancy pertaining to the
consumer was obtained, to reconcile the
address of the consumer with the
consumer reporting agency by furnishing
such address to such consumer reporting
agency as part of information regularly
furnished by the user for the period in
which the relationship is
established.''.
SEC. 316. NOTICE OF DISPUTE THROUGH RESELLER.
(a) Requirement for Reinvestigation of Disputed Information
Upon Notice From a Reseller.--Section 611(a) of the Fair Credit
Reporting Act (15 U.S.C. 1681i(a)(1)(A)) is amended--
(1) in paragraph (1)(A)--
(A) by striking ``If the completeness'' and
inserting ``Subject to subsection (f), if the
completeness'';
(B) by inserting ``, or indirectly through
a reseller,'' after ``notifies the agency
directly''; and
(C) by inserting ``or reseller'' before the
period at the end;
(2) in paragraph (2)(A)--
(A) by inserting ``or a reseller'' after
``dispute from any consumer''; and
(B) by inserting ``or reseller'' before the
period at the end; and
(3) in paragraph (2)(B), by inserting ``or the
reseller'' after ``from the consumer''.
(b) Reinvestigation Requirement Applicable to Resellers.--
Section 611 of the Fair Credit Reporting Act (15 U.S.C. 1681i),
as amended by this Act, is amended by adding at the end the
following:
``(f) Reinvestigation Requirement Applicable to
Resellers.--
``(1) Exemption from general reinvestigation
requirement.--Except as provided in paragraph (2), a
reseller shall be exempt from the requirements of this
section.
``(2) Action required upon receiving notice of a
dispute.--If a reseller receives a notice from a
consumer of a dispute concerning the completeness or
accuracy of any item of information contained in a
consumer report on such consumer produced by the
reseller, the reseller shall, within 5 business days of
receiving the notice, and free of charge--
``(A) determine whether the item of
information is incomplete or inaccurate as a
result of an act or omission of the reseller;
and
``(B) if--
``(i) the reseller determines that
the item of information is incomplete
or inaccurate as a result of an act or
omission of the reseller, not later
than 20 days after receiving the
notice, correct the information in the
consumer report or delete it; or
``(ii) if the reseller determines
that the item of information is not
incomplete or inaccurate as a result of
an act or omission of the reseller,
convey the notice of the dispute,
together with all relevant information
provided by the consumer, to each
consumer reporting agency that provided
the reseller with the information that
is the subject of the dispute, using an
address or a notification mechanism
specified by the consumer reporting
agency for such notices.
``(3) Responsibility of consumer reporting agency
to notify consumer through reseller.--Upon the
completion of a reinvestigation under this section of a
dispute concerning the completeness or accuracy of any
information in the file of a consumer by a consumer
reporting agency that received notice of the dispute
from a reseller under paragraph (2)--
``(A) the notice by the consumer reporting
agency under paragraph (6), (7), or (8) of
subsection (a) shall be provided to the
reseller in lieu of the consumer; and
``(B) the reseller shall immediately
reconvey such notice to the consumer, including
any notice of a deletion by telephone in the
manner required under paragraph (8)(A).
``(4) Reseller reinvestigations.--No provision of
this subsection shall be construed as prohibiting a
reseller from conducting a reinvestigation of a
consumer dispute directly.''.
(c) Technical and Conforming Amendment.--Section
611(a)(2)(B) of the Fair Credit Reporting Act (15 U.S.C.
1681i(a)(2)(B)) is amended in the subparagraph heading, by
striking ``from consumer''.
SEC. 317. REASONABLE REINVESTIGATION REQUIRED.
Section 611(a)(1)(A) of the Fair Credit Reporting Act (15
U.S.C. 1681i(a)(1)(A)) is amended by striking ``shall
reinvestigate free of charge'' and inserting ``shall, free of
charge, conduct a reasonable reinvestigation to determine
whether the disputed information is inaccurate''.
SEC. 318. FTC STUDY OF ISSUES RELATING TO THE FAIR CREDIT REPORTING
ACT.
(a) Study Required.--
(1) In general.--The Commission shall conduct a
study on ways to improve the operation of the Fair
Credit Reporting Act.
(2) Areas for study.--In conducting the study under
paragraph (1), the Commission shall review--
(A) the efficacy of increasing the number
of points of identifying information that a
credit reporting agency is required to match to
ensure that a consumer is the correct
individual to whom a consumer report relates
before releasing a consumer report to a user,
including--
(i) the extent to which requiring
additional points of such identifying
information to match would--
(I) enhance the accuracy of
credit reports; and
(II) combat the provision
of incorrect consumer reports
to users;
(ii) the extent to which requiring
an exact match of the first and last
name, social security number, and
address and ZIP Code of the consumer
would enhance the likelihood of
increasing credit report accuracy; and
(iii) the effects of allowing
consumer reporting agencies to use
partial matches of social security
numbers and name recognition software
on the accuracy of credit reports;
(B) requiring notification to consumers
when negative information has been added to
their credit reports, including--
(i) the potential impact of such
notification on the ability of
consumers to identify errors on their
credit reports; and
(ii) the potential impact of such
notification on the ability of
consumers to remove fraudulent
information from their credit reports;
(C) the effects of requiring that a
consumer who has experienced an adverse action
based on a credit report receives a copy of the
same credit report that the creditor relied on
in taking the adverse action, including--
(i) the extent to which providing
such reports to consumers would
increase theability of consumers to
identify errors in their credit reports; and
(ii) the extent to which providing
such reports to consumers would
increase the ability of consumers to
remove fraudulent information from
their credit reports;
(D) any common financial transactions that
are not generally reported to the consumer
reporting agencies, but would provide useful
information in determining the credit
worthiness of consumers; and
(E) any actions that might be taken within
a voluntary reporting system to encourage the
reporting of the types of transactions
described in subparagraph (D).
(3) Costs and benefits.--With respect to each area
of study described in paragraph (2), the Commission
shall consider the extent to which such requirements
would benefit consumers, balanced against the cost of
implementing such provisions.
(b) Report Required.--Not later than 1 year after the date
of enactment of this Act, the chairman of the Commission shall
submit a report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives containing a detailed summary
of the findings and conclusions of the study under this
section, together with such recommendations for legislative or
administrative actions as may be appropriate.
SEC. 319. FTC STUDY OF THE ACCURACY OF CONSUMER REPORTS.
(a) Study Required.--Until the final report is submitted
under subsection (b)(2), the Commission shall conduct an
ongoing study of the accuracy and completeness of information
contained in consumer reports prepared or maintained by
consumer reporting agencies and methods for improving the
accuracy and completeness of such information.
(b) Biennial Reports Required.--
(1) Interim reports.--The Commission shall submit
an interim report to the Congress on the study
conducted under subsection (a) at the end of the 1-year
period beginning on the date of enactment of this Act
and biennially thereafter for 8 years.
(2) Final report.--The Commission shall submit a
final report to the Congress on the study conducted
under subsection (a) at the end of the 2-year period
beginning on the date on which the final interim report
is submitted to the Congress under paragraph (1).
(3) Contents.--Each report submitted under this
subsection shall contain a detailed summary of the
findings and conclusions of the Commission with respect
to the study required under subsection (a) and such
recommendations for legislative and administrative
action as the Commission may determine to be
appropriate.
TITLE IV--LIMITING THE USE AND SHARING OF MEDICAL INFORMATION IN THE
FINANCIAL SYSTEM
SEC. 411. PROTECTION OF MEDICAL INFORMATION IN THE FINANCIAL SYSTEM.
(a) In General.--Section 604(g) of the Fair Credit
Reporting Act (15 U.S.C. 1681b(g)) is amended to read as
follows:
``(g) Protection of Medical Information.--
``(1) Limitation on consumer reporting agencies.--A
consumer reporting agency shall not furnish for
employment purposes, or in connection with a credit or
insurance transaction, a consumer report that contains
medical information about a consumer, unless--
``(A) if furnished in connection with an
insurance transaction, the consumer
affirmatively consents to the furnishing of the
report;
``(B) if furnished for employment purposes
or in connection with a credit transaction--
``(i) the information to be
furnished is relevant to process or
effect the employment or credit
transaction; and
``(ii) the consumer provides
specific written consent for the
furnishing of the report that describes
in clear and conspicuous language the
use for which the information will be
furnished; or
``(C) the information to be furnished
pertains solely to transactions, accounts, or
balances relating to debts arising from the
receipt of medical services, products, or
devises, where such information, other than
account status or amounts, is restricted or
reported using codes that do not identify, or
do not provide information sufficient to infer,
the specific provider or the nature of such
services, products, or devices, as provided in
section 605(a)(6).
``(2) Limitation on creditors.--Except as permitted
pursuant to paragraph (3)(C) or regulations prescribed
under paragraph (5)(A), a creditor shall not obtain or
use medical information pertaining to a consumer in
connection with any determination of the consumer's
eligibility, or continued eligibility, for credit.
``(3) Actions authorized by federal law, insurance
activities and regulatory determinations.--Section
603(d)(3) shall not be construed so as to treat
information or any communication of information as a
consumer report if the information or communication is
disclosed--
``(A) in connection with the business of
insurance or annuities, including the
activities described in section 18B of the
model Privacy of Consumer Financial and Health
Information Regulation issued by the National
Association of Insurance Commissioners (as in
effect on January 1, 2003);
``(B) for any purpose permitted without
authorization under the Standards for
Individually Identifiable Health Information
promulgated by the Department of Health and
Human Services pursuant to the Health Insurance
Portability and Accountability Act of 1996, or
referred to under section 1179 of such Act,
or described in section 502(e) of Public Law 106-102;
or
``(C) as otherwise determined to be
necessary and appropriate, by regulation or
order and subject to paragraph (6), by the
Commission, any Federal banking agency or the
National Credit Union Administration (with
respect to any financial institution subject to
the jurisdiction of such agency or
Administration under paragraph (1), (2), or (3)
of section 621(b), or the applicable State
insurance authority (with respect to any person
engaged in providing insurance or annuities).
``(4) Limitation on redisclosure of medical
information.--Any person that receives medical
information pursuant to paragraph (1) or (3) shall not
disclose such information to any other person, except
as necessary to carry out the purpose for which the
information was initially disclosed, or as otherwise
permitted by statute, regulation, or order.
``(5) Regulations and effective date for paragraph
(2).--
``(A) Regulations required.--Each Federal
banking agency and the National Credit Union
Administration shall, subject to paragraph (6)
and after notice and opportunity for comment,
prescribe regulations that permit transactions
under paragraph (2) that are determined to be
necessary and appropriate to protect legitimate
operational, transactional, risk, consumer, and
other needs (and which shall include permitting
actions necessary for administrative
verification purposes), consistent with the
intent of paragraph (2) to restrict the use of
medical information for inappropriate purposes.
``(B) Final regulations required.--The
Federal banking agencies and the National
Credit Union Administration shall issue the
regulations required under subparagraph (A) in
final form before the end of the 6-month period
beginning on the date of enactment of the Fair
and Accurate Credit Transactions Act of 2003.
``(6) Coordination with other laws.--No provision
of this subsection shall be construed as altering,
affecting, or superseding the applicability of any
other provision of Federal law relating to medical
confidentiality.''.
(b) Restriction on Sharing of Medical Information.--Section
603(d) of the Fair Credit Reporting Act (15 U.S.C. 1681a(d)) is
amended--
(1) in paragraph (2), by striking ``The term'' and
inserting ``Except as provided in paragraph (3), the
term''; and
(2) by adding at the end the following new
paragraph:
``(3) Restriction on sharing of medical
information.--Except for information or any
communication of information disclosed as provided in
section 604(g)(3), the exclusions in paragraph (2)
shall not apply with respect to information disclosed
to any person related by common ownership or affiliated
by corporate control, if the information is--
``(A) medical information;
``(B) an individualized list or description
based on the payment transactions of the
consumer for medical products or services; or
``(C) an aggregate list of identified
consumers based on payment transactions for
medical products or services.
(c) Definition.--Section 603(i) of the Fair Credit
Reporting Act (15 U.S.C. 1681a(i)) is amended to read as
follows:
``(i) Medical Information.--The term `medical
information'--
``(1) means information or data, whether oral or
recorded, in any form or medium, created by or derived
from a health care provider or the consumer, that
relates to--
``(A) the past, present, or future
physical, mental, or behavioral health or
condition of an individual;
``(B) the provision of health care to an
individual; or
``(C) the payment for the provision of
health care to an individual.
``(2) does not include the age or gender of a
consumer, demographic information about the consumer,
including a consumer's residence address or e-mail
address, or any other information about a consumer that
does not relate to the physical, mental, or behavioral
health or condition of a consumer, including the
existence or value of any insurance policy.''.
(d) Effective Dates.--This section shall take effect at the
end of the 180-day period beginning on the date of enactment of
this Act, except that paragraph (2) of section 604(g) of the
Fair Credit Reporting Act (as amended by subsection (a) of this
section) shall take effect on the later of--
(1) the end of the 90-day period beginning on the
date on which the regulations required under paragraph
(5)(B) of such section 604(g) are issued in final form;
or
(2) the date specified in the regulations referred
to in paragraph (1).
SEC. 412. CONFIDENTIALITY OF MEDICAL CONTACT INFORMATION IN CONSUMER
REPORTS.
(a) Duties of Medical Information Furnishers.--Section
623(a) of the Fair Credit Reporting Act (15 U.S.C. 1681s-2(a)),
as amended by this Act, is amended by adding at the end the
following:
``(9) Duty to provide notice of status as medical
information furnisher.--A person whose primary business
is providing medical services, products, or devices, or
the person's agent or assignee, who furnishes
information to a consumer reporting agency on a
consumer shall be considered a medical information
furnisher for purposes of this title, and shall notify
the agency of such status.''.
(b) Restriction of Dissemination of Medical Contact
Information.--Section 605(a) of the FairCredit Reporting Act
(15 U.S.C. 1681c(a)) is amended by adding at the end the following:
``(6) The name, address, and telephone number of
any medical information furnisher that has notified the
agency of its status, unless--
``(A) such name, address, and telephone
number are restricted or reported using codes
that do not identify, or provide information
sufficient to infer, the specific provider or
the nature of such services, products, or
devices to a person other than the consumer; or
``(B) the report is being provided to an
insurance company for a purpose relating to
engaging in the business of insurance other
than property and casualty insurance.''.
(c) No Exceptions Allowed for Dollar Amounts.--Section
605(b) of the Fair Credit Reporting Act (15 U.S.C. 1681c(b)) is
amended by striking ``The provisions of subsection (a)'' and
inserting ``The provisions of paragraphs (1) through (5) of
subsection (a)''.
(d) Coordination With Other Laws.--No provision of any
amendment made by this section shall be construed as altering,
affecting, or superseding the applicability of any other
provision of Federal law relating to medical confidentiality.
(e) FTC Regulation of Coding of Trade Names.--Section 621
of the Fair Credit Reporting Act (15 U.S.C. 1681s), as amended
by this Act, is amended by adding at the end the following:
``(g) FTC Regulation of Coding of Trade Names.--If the
Commission determines that a person described in paragraph (9)
of section 623(a) has not met the requirements of such
paragraph, the Commission shall take action to ensure the
person's compliance with such paragraph, which may include
issuing model guidance or prescribing reasonable policies and
procedures, as necessary to ensure that such person complies
with such paragraph.''.
(f) Technical and Conforming Amendments.--Section 604(g) of
the Fair Credit Reporting Act (15 U.S.C. 1681b(g)), as amended
by section 411 of this Act, is amended--
(1) in paragraph (1), by inserting ``(other than
medical contact information treated in the manner
required under section 605(a)(6))'' after ``a consumer
report that contains medical information''; and
(2) in paragraph (2), by inserting ``(other than
medical information treated in the manner required
under section 605(a)(6))'' after ``a creditor shall not
obtain or use medical information''.
(g) Effective Date.--The amendments made by this section
shall take effect at the end of the 15-month period beginning
on the date of enactment of this Act.
TITLE V--FINANCIAL LITERACY AND EDUCATION IMPROVEMENT
SEC. 511. SHORT TITLE.
This title may be cited as the ``Financial Literacy and
Education Improvement Act''.
SEC. 512. DEFINITIONS.
As used in this title--
(1) the term ``Chairperson'' means the Chairperson
of the Financial Literacy and Education Commission; and
(2) the term ``Commission'' means the Financial
Literacy and Education Commission established under
section 513.
SEC. 513. ESTABLISHMENT OF FINANCIAL LITERACY AND EDUCATION COMMISSION.
(a) In General.--There is established a commission to be
known as the ``Financial Literacy and Education Commission''.
(b) Purpose.--The Commission shall serve to improve the
financial literacy and education of persons in the United
States through development of a national strategy to promote
financial literacy and education.
(c) Membership.--
(1) Composition.--The Commission shall be composed
of--
(A) the Secretary of the Treasury;
(B) the respective head of each of the
Federal banking agencies (as defined in section
3 of the Federal Deposit Insurance Act), the
National Credit Union Administration, the
Securities and Exchange Commission, each of the
Departments of Education, Agriculture, Defense,
Health and Human Services, Housing and Urban
Development, Labor, and Veterans Affairs, the
Federal Trade Commission, the General Services
Administration, the Small Business
Administration, the Social Security
Administration, the Commodity Futures Trading
Commission, and the Office of Personnel
Management; and
(C) at the discretion of the President, not
more than 5 individuals appointed by the
President from among the administrative heads
of any other Federal agencies, departments, or
other Federal Government entities, whom the
President determines to be engaged in a serious
effort to improve financial literacy and
education.
(2) Alternates.--Each member of the Commission may
designate an alternate if the member is unable to
attend a meeting of the Commission. Such alternate
shall be an individual who exercises significant
decisionmaking authority.
(d) Chairperson.--The Secretary of the Treasury shall serve
as the Chairperson.
(e) Meetings.--The Commission shall hold, at the call of
the Chairperson, at least 1 meeting every 4 months. All such
meetings shall be open to the public. The Commission may hold,
at the call of the Chairperson, such other meetings as the
Chairperson sees fit to carry out this title.
(f) Quorum.--A majority of the members of the Commission
shall constitute a quorum, but a lesser number of members may
hold hearings.
(g) Initial Meeting.--The Commission shall hold its first
meeting not later than 60 days after the date of enactment of
this Act.
SEC. 514. DUTIES OF THE COMMISSION.
(a) Duties.--
(1) In general.--The Commission, through the
authority of the members referred to in section 513(c),
shall take such actions as it deems necessary to
streamline, improve, or augment the financial literacy
and education programs, grants, and materials of the
Federal Government, including curricula for all
Americans.
(2) Areas of emphasis.--To improve financial
literacy and education, the Commission shall emphasize,
among other elements, basic personal income and
household money management and planning skills,
including how to--
(A) create household budgets, initiate
savings plans, and make strategic investment
decisions for education, retirement, home
ownership, wealth building, or other savings
goals;
(B) manage spending, credit, and debt,
including credit card debt, effectively;
(C) increase awareness of the availability
and significance of credit reports and credit
scores in obtaining credit, the importance of
their accuracy (and how to correct
inaccuracies), their effect on credit terms,
and the effect common financial decisions may
have on credit scores;
(D) ascertain fair and favorable credit
terms;
(E) avoid abusive, predatory, or deceptive
credit offers and financial products;
(F) understand, evaluate, and compare
financial products, services, and
opportunities;
(G) understand resources that ought to be
easily accessible and affordable, and that
inform and educate investors as to their rights
and avenues of recourse when an investor
believes his or her rights have been violated
by unprofessional conduct of market
intermediaries;
(H) increase awareness of the particular
financial needs and financial transactions
(such as the sending of remittances) of
consumers who are targeted in multilingual
financial literacy and education programs and
improve the development and distribution of
multilingual financial literacy and education
materials;
(I) promote bringing individuals who lack
basic banking services into the financial
mainstream by opening and maintaining an
account with a financial institution; and
(J) improve financial literacy and
education through all other related skills,
including personal finance and related economic
education, with the primary goal of programs
not simply to improve knowledge, but rather to
improve consumers' financial choices and
outcomes.
(b) Website.--
(1) In general.--The Commission shall establish and
maintain a website, such as the domain name
``FinancialLiteracy.gov'', or a similar domain name.
(2) Purposes.--The website established under
paragraph (1) shall--
(A) serve as a clearinghouse of information
about Federal financial literacy and education
programs;
(B) provide a coordinated entry point for
accessing information about all Federal
publications, grants, and materials promoting
enhanced financial literacy and education;
(C) offer information on all Federal grants
to promote financial literacy and education,
and on how to target, apply for, and receive a
grant that is most appropriate under the
circumstances;
(D) as the Commission considers
appropriate, feature website links to efforts
that have no commercial content and that
feature information about financial literacy
and education programs, materials, or
campaigns; and
(E) offer such other information as the
Commission finds appropriate to share with the
public in the fulfillment of its purpose.
(c) Toll-Free Hotline.--The Commission shall establish a
toll-free telephone number that shall be made available to
members of the public seeking information about issues
pertaining to financial literacy and education.
(d) Development and Dissemination of Materials.--The
Commission shall--
(1) develop materials to promote financial literacy
and education; and
(2) disseminate such materials to the general
public.
(e) Coordination of Efforts.--The Commission shall take
such steps as are necessary to coordinate and promote financial
literacy and education efforts at the State and local level,
including promoting partnerships among Federal, State, and
local governments, nonprofit organizations, and private
enterprises.
(f) National Strategy.--
(1) In general.--The Commission shall--
(A) not later than 18 months after the date
of enactment of this Act, develop a national
strategy to promote basic financial literacy
and education among all American consumers; and
(B) coordinate Federal efforts to implement
the strategy developed under subparagraph (A).
(2) Strategy.--The strategy to promote basic
financial literacy and education required to be
developed under paragraph (1) shall provide for--
(A) participation by State and local
governments and private, nonprofit, and public
institutions in the creation and implementation
of such strategy;
(B) the development of methods--
(i) to increase the general
financial education level of current
and future consumers of financial
services and products; and
(ii) to enhance the general
understanding of financial services and
products;
(C) review of Federal activities designed
to promote financial literacy and education,
and development of a plan to improve
coordination of such activities; and
(D) the identification of areas of overlap
and duplication among Federal financial
literacy and education activities and proposed
means of eliminating any such overlap and
duplication.
(3) National strategy review.--The Commission
shall, not less than annually, review the national
strategy developed under this subsection and make such
changes and recommendations as it deems necessary.
(g) Consultation.--The Commission shall actively consult
with a variety of representatives from private and nonprofit
organizations and State and local agencies, as determined
appropriate by the Commission.
(h) Reports.--
(1) In general.--Not later than 18 months after the
date of the first meeting of the Commission, and
annually thereafter, the Commission shall issue a
report, the Strategy for Assuring Financial Empowerment
(``SAFE Strategy''), to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives on the progress of the Commission in
carrying out this title.
(2) Contents.--The report required under paragraph
(1) shall include--
(A) the national strategy for financial
literacy and education, as described under
subsection (f);
(B) information concerning the
implementation of the duties of the Commission
under subsections (a) through (g);
(C) an assessment of the success of the
Commission in implementing the national
strategy developed under subsection (f);
(D) an assessment of the availability,
utilization, and impact of Federal financial
literacy and education materials;
(E) information concerning the content and
public use of--
(i) the website established under
subsection (b); and
(ii) the toll-free telephone number
established under subsection (c);
(F) a brief survey of the financial
literacy and education materials developed
under subsection (d), and data regarding the
dissemination and impact of such materials, as
measured by improved financial decisionmaking;
(G) a brief summary of any hearings
conducted by the Commission, including a list
of witnesses who testified at such hearings;
(H) information about the activities of the
Commission planned for the next fiscal year;
(I) a summary of all Federal financial
literacy and education activities targeted to
communities that have historically lacked
access to financial literacy materials and
education, and have been underserved by the
mainstream financial systems; and
(J) such other materials relating to the
duties of the Commission as the Commission
deems appropriate.
(3) Initial report.--The initial report under
paragraph (1) shall include information regarding all
Federal programs, materials, and grants which seek to
improve financial literacy, and assess the
effectiveness of such programs.
(i) Testimony.--The Commission shall annually provide
testimony by the Chairperson to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives.
SEC. 515. POWERS OF THE COMMISSION.
(a) Hearings.--
(1) In general.--The Commission shall hold such
hearings, sit and act at such times and places, take
such testimony, and receive such evidence as the
Commission deems appropriate to carry out this title.
(2) Participation.--In hearings held under this
subsection, the Commission shall consider inviting
witnesses from, among other groups--
(A) other Federal Government officials;
(B) State and local government officials;
(C) consumer and community groups;
(D) nonprofit financial literacy and
education groups (such as those involved in
personal finance and economic education); and
(E) the financial services industry.
(b) Information From Federal Agencies.--The Commission may
secure directly from any Federal department or agency such
information as the Commission considers necessary to carry out
this title. Upon request of the Chairperson, the head of such
department or agency shall furnish such information to the
Commission.
(c) Periodic Studies.--The Commission may conduct periodic
studies regarding the state of financial literacy and education
in the United States, as the Commission determines appropriate.
(d) Multilingual.--The Commission may take any action to
develop and promote financial literacy and education materials
in languages other than English, as the Commission deems
appropriate, including for the website established under
section 514(b), at the toll-free number established under
section 514(c), and in the materials developed and disseminated
under section 514(d).
SEC. 516. COMMISSION PERSONNEL MATTERS.
(a) Compensation of Members.--Each member of the Commission
shall serve without compensation in addition to that received
for their service as an officer or employee of the United
States.
(b) Travel Expenses.--The members of the Commission shall
be allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes orregular places of business
in the performance of services for the Commission.
(c) Assistance.--
(1) In general.--The Director of the Office of
Financial Education of the Department of the Treasury
shall provide assistance to the Commission, upon
request of the Commission, without reimbursement.
(2) Detail of government employees.--Any Federal
Government employee may be detailed to the Commission
without reimbursement, and such detail shall be without
interruption or loss of civil service status or
privilege.
SEC. 517. STUDIES BY THE COMPTROLLER GENERAL.
(a) Effectiveness Study.--Not later than 3 years after the
date of enactment of this Act, the Comptroller General of the
United States shall submit a report to Congress assessing the
effectiveness of the Commission in promoting financial literacy
and education.
(b) Study and Report on the Need and Means for Improving
Financial Literacy Among Consumers.--
(1) Study required.--The Comptroller General of the
United States shall conduct a study to assess the
extent of consumers' knowledge and awareness of credit
reports, credit scores, and the dispute resolution
process, and on methods for improving financial
literacy among consumers.
(2) Factors to be included.--The study required
under paragraph (1) shall include the following issues:
(A) The number of consumers who view their
credit reports.
(B) Under what conditions and for what
purposes do consumers primarily obtain a copy
of their consumer report (such as for the
purpose of ensuring the completeness and
accuracy of the contents, to protect against
fraud, in response to an adverse action based
on the report, or in response to suspected
identity theft) and approximately what
percentage of the total number of consumers who
obtain a copy of their consumer report do so
for each such primary purpose.
(C) The extent of consumers' knowledge of
the data collection process.
(D) The extent to which consumers know how
to get a copy of a consumer report.
(E) The extent to which consumers know and
understand the factors that positively or
negatively impact credit scores.
(3) Report required.--Before the end of the 12-
month period beginning on the date of enactment of this
Act, the Comptroller General shall submit a report to
Congress on the findings and conclusions of the
Comptroller General pursuant to the study conducted
under this subsection, together with such
recommendations for legislative or administrative
action as the Comptroller General may determine to be
appropriate, including recommendations on methods for
improving financial literacy among consumers.
SEC. 518. THE NATIONAL PUBLIC SERVICE MULTIMEDIA CAMPAIGN TO ENHANCE
THE STATE OF FINANCIAL LITERACY.
(a) In General.--The Secretary of the Treasury (in this
section referred to as the ``Secretary''), after review of the
recommendations of the Commission, as part of the national
strategy, shall develop, implement, and conduct a pilot
national public service multimedia campaign to enhance the
state of financial literacy and education in the United States.
(b) Program Requirements.--
(1) Public service campaign.--The Secretary, after
review of the recommendations of the Commission, shall
select and work with a nonprofit organization or
organizations that are especially well-qualified in the
distribution of public service campaigns, and have
secured private sector funds to produce the pilot
national public service multimedia campaign.
(2) Development of multimedia campaign.--The
Secretary, after review of the recommendations of the
Commission, shall develop, in consultation with
nonprofit, public, or private organizations, especially
those that are well qualified by virtue of their
experience in the field of financial literacy and
education, to develop the financial literacy national
public service multimedia campaign.
(3) Focus of campaign.--The pilot national public
service multimedia campaign shall be consistent with
the national strategy, and shall promote the toll-free
telephone number and the website developed under this
title.
(c) Multilingual.--The Secretary may develop the multimedia
campaign in languages other than English, as the Secretary
deems appropriate.
(d) Performance Measures.--The Secretary shall develop
measures to evaluate the effectiveness of the pilot national
public service multimedia campaign, as measured by improved
financial decision making among individuals.
(e) Report.--For each fiscal year for which there are
appropriations pursuant to the authorization in subsection (e),
the Secretary shall submit a report to the Committee on
Banking, Housing, and Urban Affairs and the Committee on
Appropriations of the Senate and the Committee on Financial
Services and the Committee on Appropriations of the House of
Representatives, describing the status and implementation of
the provisions of this section and the state of financial
literacy and education in the United States.
(f) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary, not to exceed $3,000,000
for fiscal years 2004, 2005, and 2006, for the development,
production, and distribution of a pilot national public service
multimedia campaign under this section.
SEC. 519. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Commission
such sums as may be necessary to carry out this title,
including administrative expenses of the Commission.
TITLE VI--PROTECTING EMPLOYEE MISCONDUCT INVESTIGATIONS
SEC. 611. CERTAIN EMPLOYEE INVESTIGATION COMMUNICATIONS EXCLUDED FROM
DEFINITION OF CONSUMER REPORT.
(a) In General.--Section 603 of the Fair Credit Reporting
Act (15 U.S.C. 1681a), as amended by this Act, is amended by
adding at the end the following:
``(x) Exclusion of Certain Communications for Employee
Investigations.--
``(1) Communications described in this
subsection.--A communication is described in this
subsection if--
``(A) but for subsection (d)(2)(D), the
communication would be a consumer report;
``(B) the communication is made to an
employer in connection with an investigation
of--
``(i) suspected misconduct relating
to employment; or
``(ii) compliance with Federal,
State, or local laws and regulations,
the rules of a self-regulatory
organization, or any preexisting
written policies of the employer;
``(C) the communication is not made for the
purpose of investigating a consumer's credit
worthiness, credit standing, or credit
capacity; and
``(D) the communication is not provided to
any person except--
``(i) to the employer or an agent
of the employer;
``(ii) to any Federal or State
officer, agency, or department, or any
officer, agency, or department of a
unit of general local government;
``(iii) to any self-regulatory
organization with regulatory authority
over the activities of the employer or
employee;
``(iv) as otherwise required by
law; or
``(v) pursuant to section 608.
``(2) Subsequent disclosure.--After taking any
adverse action based in whole or in part on a
communication described in paragraph (1), the employer
shall disclose to the consumer a summary containing the
nature and substance of the communication upon which
the adverse action is based, except that the sources of
information acquired solely for use in preparing what
would be but for subsection (d)(2)(D) an investigative
consumer report need not be disclosed.
``(3) Self-regulatory organization defined.--For
purposes of this subsection, the term `self-regulatory
organization' includes any self-regulatory organization
(as defined in section 3(a)(26) of the Securities
Exchange Act of 1934), any entity established under
title I of the Sarbanes-Oxley Act of 2002, any board of
trade designated by the Commodity Futures Trading
Commission, and any futures association registered with
such Commission.''.
(b) Technical and Conforming Amendment.--Section
603(d)(2)(D) of the Fair Credit Reporting Act (15 U.S.C.
1681a(d)(2)(D)) is amended by inserting ``or (x)'' after
``subsection (o)''.
TITLE VII--RELATION TO STATE LAWS
SEC. 711. RELATION TO STATE LAWS.
Section 625 of the Fair Credit Reporting Act (15 U.S.C.
1681t), as so designated by section 214 of this Act, is
amended--
(1) in subsection (a), by inserting ``or for the
prevention or mitigation of identity theft,'' after
``information on consumers,'';
(2) in subsection (b), by adding at the end the
following:
``(5) with respect to the conduct required by the
specific provisions of--
``(A) section 605(g);
``(B) section 605A;
``(C) section 605B;
``(D) section 609(a)(1)(A);
``(E) section 612(a);
``(F) subsections (e), (f), and (g) of
section 615;
``(G) section 621(f);
``(H) section 623(a)(6); or
``(I) section 628.''; and
(3) in subsection (d)--
(A) by striking paragraph (2);
(B) by striking ``(c)--'' and all that
follows through ``do not affect'' and inserting
``(c) do not affect''; and
(C) by striking ``1996; and'' and inserting
``1996.''.
TITLE VIII--MISCELLANEOUS
SEC. 811. CLERICAL AMENDMENTS.
(a) Short Title.--Section 601 of the Fair Credit Reporting
Act (15 U.S.C. 1601 note) is amended by striking ``the Fair
Credit Reporting Act.'' and inserting ``the `Fair Credit
Reporting Act'.''.
(b) Section 604.--Section 604(a) of the Fair Credit
Reporting Act (15 U.S.C. 1681b(a)) is amended in paragraphs (1)
through (5), other than subparagraphs (E) and (F) of paragraph
(3), by moving each margin 2 ems to the right.
(c) Section 605.--
(1) Section 605(a)(1) of the Fair Credit Reporting
Act (15 U.S.C. 1681c(a)(1)) is amended by striking
``(1) cases'' and inserting ``(1) Cases''.
(2)(A) Section 5(1) of Public Law 105-347 (112
Stat. 3211) is amended by striking ``Judgments which''
and inserting ``judgments which''.
(B) The amendment made by subparagraph (A) shall be
deemed to have the same effective date as section 5(1)
of Public Law 105-347 (112 Stat. 3211).
(d) Section 609.--Section 609(a) of the Fair Credit
Reporting Act (15 U.S.C. 1681g(a)) is amended--
(1) in paragraph (2), by moving the margin 2 ems to
the right; and
(2) in paragraph (3)(C), by moving the margins 2
ems to the left.
(e) Section 617.--Section 617(a)(1) of the Fair Credit
Reporting Act (15 U.S.C. 1681o(a)(1)) is amended by adding
``and'' at the end.
(f) Section 621.--Section 621(b)(1)(B) of the Fair Credit
Reporting Act (15 U.S.C. 1681s(b)(1)(B)) is amended by striking
``25(a)'' and inserting ``25A''.
(g) Title 31.--Section 5318 of title 31, United States
Code, is amended by redesignating the second item designated as
subsection (l) (relating to applicability of rules) as
subsection (m).
(h) Conforming Amendment.--Section 2411(c) of Public Law
104-208 (110 Stat. 3009-445) is repealed.
And the Senate agree to the same.
For consideration of the House bill and the
Senate amendment, and modifications committed
to conference:
Michael G. Oxley,
Doug Bereuter,
Spencer Bachus,
Mike Castle,
Ed Royce,
Robert W. Ney,
Sue Kelly,
Paul Gillmor,
Steven C. LaTourette,
Judy Biggert,
Pete Sessions,
Barney Frank,
Paul E. Kanjorski,
Melvin L. Watt,
Luis V. Gutierrez,
Darlene Hooley,
Dennis Moore,
Managers on the Part of the House.
Richard Shelby,
Robert F. Bennett,
Wayne Allard,
Michael B. Enzi,
Paul Sarbanes,
Christopher J. Dodd,
Tim Johnson,
Managers on the Part of the Senate.
JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE
The managers on the part of the House and the Senate at
the conference on the disagreeing votes of the two Houses on
the amendment of the House to the bill (H.R. 2622) to amend the
Fair Credit Reporting Act, to prevent identity theft, improve
resolution of consumer disputes, improve the accuracy of
consumer records, make improvements in the use of, and consumer
access to, credit information, and for other purposes, submit
the following joint statement to the House and the Senate in
explanation of the effect of the action agreed upon by the
managers and recommended in the accompanying conference report:
The Senate amendment to the text of the bill struck all
of the House bill after the enacting clause and inserted a
substitute text.
The House recedes from its disagreement to the amendment
of the Senate with an amendment that is a substitute for the
House bill and the Senate amendment. The Committee of
Conference met on November 21, 2003 (the Senate Chairing) and
resolved their differences. The differences between the House
bill, the Senate amendment, and the substitute agreed to in
conference are noted below, except for clerical corrections,
conforming changes made necessary by agreements reached by the
conferees, and minor drafting and clerical changes.
The Fair Credit Reporting Act was enacted in 1970, and
substantially amended in 1996. The amendments made at that time
were necessary to make the law relevant in an information age.
Included in the 1996 amendment were a number of provisions that
explicitly preempt state laws. These preemptions expire on
January 1, 2004.
Since 1996, the national credit markets have undergone
significant change. Most of these changes were the result of
technological innovations. Technology has expanded the
availability of credit, and permitted instant credit decisions.
Mortgage financing that once took weeks now takes hours, and
home ownership rates are at historic highs. Consumer credit can
be obtained at the point of sale for major items like
automobiles. Technology and the prudently-regulated free flow
of consumer information under the FCRA has made much of this
possible. We live in a mobile society in which 40 million
Americans move annually. The FCRA permits consumers to
transport their credit with them wherever they go. Both
Committees of jurisdiction have developed detailed records
regarding the benefits that our national credit reporting
system has visited upon consumers of financial products.
Despite the myriad benefits of technology to the American
consumer, there has been one drawback. Namely, the free flow
information has enabled the explosive growth of a new crime--
identity theft. Both Committees developed comprehensive hearing
records regarding the growth of this crime, and the havoc it
visits upon the lives of its victims. Law enforcement
professionals are cognizant of the growth of this crime, and
have worked with the affected industries to combat it. While
criminal prosecutions and strict fraud detection protocols can
curtail identity theft, and punish the wrongdoers, not enough
had been done heretofore to aid the real victims of this
crime--the consumer whose identity is assumed, and can spend
months or years trying to rehabilitate their credit and re-
order their affairs.
The House bill and the Senate amendment contain a number
of identical provisions. In other instances, the provisions in
the respective bills addressed the same issue in a slightly
different manner. Both the House bill and the Senate amendment
addressed the provisions of the FCRA that preempted state laws,
and are due to expire on January 1, 2004. Both bills addressed
identity theft, medical information privacy and promote greater
consumer access to their credit reports.
The House bill, H.R. 2622, and the bill that served as
the core of the Senate amendment (S. 1753) are each the result
of an extensive deliberative and legislative process with a
three-fold purpose: to assist the victims of identity theft;
modernize the FCRA and; enhance the national credit reporting
system. Readers should refer to the Committee Reports for the
respective bills for further elaboration. The conference
agreement contains provisions to accomplish these goals. It is
the conferees' belief that this legislation will assist the
victims of identity theft, and ensure the operational
efficiency of our national credit system by creating a number
of preemptive national standards.
For consideration of the House bill and the
Senate amendment, and modifications committed
to conference:
Michael G. Oxley,
Doug Bereuter,
Spencer Bachus,
Mike Castle,
Ed Royce,
Robert W. Ney,
Sue Kelly,
Paul Gillmor
Steven C. LaTourette,
Judy Biggert,
Pete Sessions,
Barney Frank,
Paul E. Kanjorski,
Melvin L. Watt,
Luis V. Gutierrez,
Darlene Hooley,
Dennis Moore,
Managers on the Part of the House.
Richard Shelby,
Robert F. Bennett,
Wayne Allard,
Michael B. Enzi,
Paul Sarbanes,
Christopher J. Dodd,
Tim Johnson,
Managers on the Part of the Senate.